JOm  W,  BOOKWALTEJli^ 


IF   NOT   SILVER 
WHAT? 


BY 

JOHN  W.  BOOKW ALTER 


SPRINGFIELD,  OHIO 

1896 


it  O  J     0 

■'     '      •  *   '    O      i  . 
:,    3        i      '  3 


Copyright,  1896,  by 
JOHN  W.  BOOKWALTER 


Press  of  J.  J.  Little  &  Co. 
Astor  Place,  New  York 


*      «     •     •  •        « 

^'      •    t      •         t     t     « 


<y> 


Ui 


"If  you  will  show  me  a  system  whicli  gives  absolute 
^  permanence,  I  will  take  it  in  preference  to  any  other.     But 
of  all  conceivable  systems  of  currency,  that  system  is  as- 
suredly the   worst  which  gives   you  a  standard  steadily, 
^»•  continuously,  indefinitely  appreciating,  and  which,  by  that 
—  very  fact,  throws  a  burden  upon  every  man  of  enterprise, 
o  upon  every  man  who  desires  to  promote  the  agricultural  or 
the  industrial  resources  of  the  country,  and  benefits  no 
human  being  whatever  but  the  owner  of  fixed  debts   in 
gold." — Speech  of  the  Right  Hon.  A.   J.   Balfouk,  at 
Manchester,  England,  October  27,  1893. 


386396 


As  a  manufacturer  and  somewhat  extensive 
land  owner  I  have  a  great  personal  interest  in 
the  money  question.  As  a  traveller  I  have 
studied  the  situation  in  other  nations,  and  thus, 
I  may  modestly  say,  have  enjoyed  the  great 
advantage  of  getting  a  view  in  no  wise  disturbed 
by  partisan  politics.  As  one  whose  prosperity 
depends  almost  entirely  upon  that  of  the  farmers, 
I  have  naturally  thought  most  of  the  effect  mono- 
metallism has  had,  and  will  continue  to  have, 
upon  them.  I  have,  in  a  sense,  been  compelled 
to  think  much  on  this  great  issue.  These  facts 
are  my  apology,  if  any  apology  is  needed,  for  giv- 
ing my  thoughts  to  the  public.  But  is  any 
apology  needed  ?  Providence  has  granted  to  a 
few  the  leisure  and  the  opportunity  to  study  these 
economic  problems,  on  the  correct  solution  of 
which  the  welfare  of  millions,  whose  toil  leaves 
them  little  leisure  for  study,  depends.  Is  it  not 
the  supreme  moral  duty  of  those  few  to  give  their 
conclusions  to  the  public  ?  I  have  always  thought 
so,  and  in  that  spirit  I  present  this  little  work, 
and  ask  the  laboring  producers  to  give  a  candid 
consideration  to  the  views  herein  presented.     It 


may  be  that  some  of  these  views  will  be  success- 
fully controverted,  but  the  duty  remains  the 
same.  If  they  should  aid  in  arriving  at  a  correct 
solution  of  the  great  problem,  though  the  solution 
be  different  from  that  I  have  indicated,  I  shall  be 
many  times  repaid  for  my  labor. 

John  W.  Bookwalter. 

Speingfield,  Ohio,  August  5,  1896. 


CONTENTS. 


Objections  to  Silver,  and  Comments  thereon. 
Demonetization  of  Gold,      .... 
Relative  Production  of  Gold  and  Silver, 

Is  Bimetallism  Practicable? 

Bimetallism  Abroad, 

The  "Dump"  of  Silver,        .... 
Asia's  Demand  for  the  Precious  Metals, 


1 

35 
49 

71 

89 

116 

123 


IF  NOT  SILVER,  WHAT? 


OBJECTIONS    TO    SILVER,   AND   COM- 
MENTS  THEREON. 

Silver  is  too  bulky  for  use  in  large 
sums. 

That  objection  is  obsolete.  We  do  not  now 
carry  coin ;  we  carry  its  paper  representatives, 
those  issued  by  government  being  absolutely 
secured.  This  combines  all  the  advantage  of  coin, 
bank  paper,  and  the  proposed  fiat  money.  A 
silver  certificate  for  $500  weighs  less  than  a  gold 
dollar.  In  that  denomination  the  Jay  Gould 
estate  could  be  carried  by  one  man. 

But  silver  certificates  would  not  remain 
at  par. 

At  par  with  what  ?  Everything  in  the  universe 
is  at  par  with  itself.     The  volume  of  certificates 


2  IF  NOT  SILVER,   WHAT? 

issued  by  the  government  would  be  exactly  the 
amount  of  the  metal  deposited,  and  that  amount 
could  never  be  suddenly  increased  or  diminished, 
for  the  product  of  the  mines  in  any  one  year  is 
very  seldom  more  than  three  per  cent,  of  the  stock 
already  on  hand,  and  half  of  that  is  used  in  the 
arts.  It  is  self-evident,  therefore,  that  such  cer- 
tificates would  be  many  times  more  stable  in  value 
than  any  form  of  bank  paper  yet  devised. 

Gold  would  go  out  of  circulation. 

It  has  already  gone  out.  Under  the  present 
policy  of  the  government  we  have  all  the  disad- 
vantages of  both  systems  and  the  advantages  of 
neither,  with  the  added  element  of  chronic  uncer- 
tainty and  an  artificial  scare  gotten  up  for  political 
purposes. 

And  that  very  scare  shows  an  impor- 
tant fact  which  you  silverites  ought  to 
heed — that  nearly  all  the  bankers  and 
heavy  moneyed  men  are  opposed  to  free 
coinage. 

Nearly  all  the  slaveholders  were  opposed  to 
emancipation.  All  the  landlords  in  Great  Britain 
were  opposed  to  the  abolition  of  the  Corn  Laws, 


OBJECTIONS   TO   SILVER.  o 

and  all  the  silversmiths  of  Ephesus  were  violently 
opposed  to  the  "  agitation "  started  by  St.  Paul. 
And  what  of  it  ?  The  silversmiths  were  honest 
enough  to  admit  the  cause  of  their  opposition 
(Acts  xix.  24,  28),  but  these  fellows  are  not.  The 
Ephesians  got  up  a  riot ;  these  fellows  get  up 
panics.  "Have  ye  not  read  that  when  the  devil 
goeth  out  of  a  man  then  it  teareth  him  ?  " 

But  are  not  bankers  and  other  men  who 
handle  money  as  a  business  better  quali- 
fied than  other  people  to  judge  of  the 
proper  metal  ? 

Certainly  not.  On  the  contrary,  they  are  for 
many  reasons  much  less  competent,  as  experience 
has  repeatedly  shown.  All  students  of  social  science 
know,  indeed  all  close  observers  know,  that  those 
who  do  the  routine  work  in  any  vocation  seldom 
form  comprehensive  views  of  it,  and  those  who 
manage  the  details  of  a  business  are  very  rarely 
indeed  able  to  master  the  higher  philosophy 
thereof.  This  is  a  general  truth  applicable  to  all 
vocations  except  those,  like  law,  in  which  a  mas- 
tery of  the  science  is  a  necessity  for  conducting 
the  details.  Experts  in  details  often  make  the 
worst  blunders  in  general  management.     Nearly 


4  IF  NOT  SILVER,   WHAT? 

all  the  inventions  of  perpetual  motion  come  from 
practical  mechanics.  Nearly  all  the  crazy  designs 
in  motors  come  from  engineers.  The  educational 
schemes  of  truly  colossal  absurdity  come  mostly 
from  teachers  ;  all  the  quack  nostrums  and  elixirs 
to  *' restore  lost  manhood  "are  invented  by  doc- 
tors, and  nearly  all  the  crazy  religions  are  started 
by  preachers. 

On  the  other  hand,  three-fourths  of  the  great 
inventions  have  been  by  men  who  did  not  work  at 
the  business  they  improved.  The  world's  great 
financiers  have  not  been  bankers.  Alexander 
Hamilton  was  not  a  banker.  Neither  was  Albert 
Gallatin,  nor  Eobert  J.  Walker,  nor  James 
Guthrie,  nor  Salmon  P.  Chase.  William  Patter- 
son, who  founded  the  Bank  of  England,  was  a 
sailor  and  trader ;  and  of  the  British  Chancellors 
of  the  Exchequer  whose  names  shine  in  history, 
scarcely  one  was  a  banker.  One  of  Christ's  disci- 
ples was  a  banker,  and  the  end  of  his  scientific 
financiering  is  reported  in  Acts  i.  18.  John  Law 
also,  whose  very  name  is  a  synonym  for  foolish 
financial  schemes,  was  a  banker,  and  a  very  suc- 
cessful one.  Where  was  there  ever  a  crazier 
scheme  than  the  so-called  ''Baltimore  Plan,"  ex- 
clusively the  work  of  bankers  ? 


OBJECTIONS   TO   SILVER.  O 

But  as  the  bankers  and  great  capitalists 
have  no  faith  in  it,  the  free  coinage  of  sil- 
ver would  certainly  precipitate  a  panic. 

The  gold  basis  has  already  precipitated  several 
panics.  Even  in  so  conservative  a  country  as 
England,  they  have,  since  adopting  monometal- 
lism, had  a  severe  currency  panic  every  four  years, 
and  a  great  industrial  depression  on  an  average 
once  in  seven  years.  The  only  reason  we  have 
not  done  worse  is  that  the  rapid  development  of 
the  natural  resources  of  the  country  saves  us  from 
the  consequences  of  our  folly.  We  draw  on  the 
future,  and  in  no  long  time  it  honors  our  drafts. 
Nevertheless,  in  the  twenty-three  years  since  silver 
was  demonetized  we  have  had  two  grand  panics, 
several  minor  currency  panics,  hundreds  of  thou- 
ands  of  bankruptcies  with  liabilities  of  billions, 
and  five  labor  wars  in  which  900  persons  were 
killed  and  $230,000,000  worth  of  property  de- 
stroved.     Could  a  silver  basis  do  worse  ? 

You  admit,  then,  that  the  immediate 
adoption  of  free  coinage  would,  for  a  while 
at  least,  drive  gold  abroad  ? 

And  what  then  ?  Why  do  the  gold  men  always 
stop  with  that  statement  and  so  carefully  avoid 


6  IF   NOT   SILVER,    WHAT? 

inquiry  into  what  would  follow  ?  Let  us  look  into 
it.  We  may  have  in  this  country  $500,000,000 
in  gold,  though  no  one  can  tell  where  it  is.  As- 
suming that  free  coinage  would  send  it  all  abroad, 
the  inevitable  result  would  be  a  gold  inflation  in 
Europe,  which  would  cause  a  rise  in  prices.  I 
observe  that  of  late  the  gold  organs  have  been 
denying  this — denying,  in  fact,  the  quantitative 
principle  in  finance,  something  never  denied  be- 
fore this  discussion  arose.  It  is  too  true,  as  some 
philosopher  has  said,  that  if  a  property  interest 
depended  on  it,  there  would  soon  be  plenty  of  able 
men  to  deny  the  law  of  gravitation.  But  as  the 
men  who  deny  it  in  one  breath  admit  it  in  the  next 
by  assuring  us  that  we  shall  soon  have  a  great  in- 
crease in  the  production  of  gold,  and  that  prices 
will  therefore  rise,  we  may  with  confidence  adhere 
to  the  established  truth  of  political  economy. 

Sending  our  gold  to  Europe,  then,  would  raise 
prices  there,  which  would  raise  the  price  of  our 
staple  exports,  such  as  wheat,  meat,  and  cotton  ; 
the  great  rise  in  the  price  of  these  would,  of 
course,  stimulate  exports,  and  thus  aid  us  in 
maintaining  a  favorable  balance,  would  restore  to 
the  farmers  that  income  which  they  have  lost  by 
the  decline  of  prices,  would  thus  put  into  their 


OBJECTIONS  TO  SILVER.  ? 

hands  the  power  to  buy  manufactured  goods  and 
to  pay  our  annual  interest  debt  to  Europe  by  com- 
modities instead  of  gold.  In  short,  if  the  gold 
went  abroad,  it  would  necessarily  be  but  a  short 
time  till  much  of  it  would  come  back  to  pay  for 
our  agricultural  exports,  and  at  the  same  time  our 
farmers  would  get  the  benefit  of  higher  prices  by 
both  operations.  If  any  man  doubts  that  an  in- 
creased gold  supply  in  Europe  would  increase  the 
selling  price  of  our  farm  surplus,  I  ask  him  to 
examine  the  figures  for  the  twelve  years  following 
the  discovery  of  gold  in  California,  or  the  history 
of  prices  in  the  century  following  the  discovery  of 
America — an  era  described  by  all  economists  as 
one  of  inflation.  Is  there  any  reason  why  a  like 
cause  should  not  now  produce  like  effects  ? 

In  the  meantime,  however,  all  the  other 
nations  would  dump  their  silver  upon  us 
and  we  should  be  overloaded  with  it. 

Where  would  the  silver  come  from  ?  The  best 
authorities  agree  that  there  is  not  enough  free 
silver  in  the  world  to  even  fill  the  place  of  our 
gold,  which,  you  say,  would  be  expelled.  And 
right  here  is  where  the  advocates  of  the  gold 
standard  contradict  every  well-established  princi- 


8  IF  NOT   SILVER,    WHAT? 

pie  of  political  economy,  and  every  lesson  of  ex- 
perience, by  declaring  that  the  transfer  of  all  our 
gold  to  Europe  would  not  cheapen  it  there,  and 
that  free  coinage  would  not  increase  the  yalue  of 
silver.  They  insist  that  we  should  still  have 
**50-cent  dollars."  Stripped  of  all  its  fine  gar- 
niture of  rhetoric,  their  proposition  simply 
amounts  to  this  :  The  sudden  addition  of  20 
per  cent,  to  Europe's  supply  of  gold  would  not 
cheapen  it,  and  making  a  market  here  for  all  the 
free  silver  in  the  world  would  not  raise  its  value  ; 
laying  the  burden  of  sustaining  an  enormous  mass 
of  credit  currency  on  one  metal  instead  of  two  has 
added  nothing  to  the  value  of  that  metal ;  a  thirty 
years*  war  on  the  other  metal  was  not  the  cause  of 
its  depreciation  in  terms  of  gold,  and  if  the  con- 
ditions were  reversed,  greatly  increasing  the  de- 
mand for  silver  and  decreasing  the  demand  for 
gold,  they  would  remain  in  relative  values  just  the 
same.  If  those  propositions  are  true,  all  political 
economy  is  false. 

Government  cannot  create  values,  in  silver 
or  anything  else. 

You  have  seen  it  done  fifty  times  if  you  are  as 
old  a£  I.    During  the  war,  government  once  raised 


OBJECTIONS   TO   SILVER.  9 

the  price  of  horses  $20  per  head  in  a  single  day. 
On  a  certain  day  the  land  in  the  Platte  Valley,  for 
perhaps  one  hundred  miles  west  of  Omaha,  was 
worth  preemption  price ;  the  next  day  it  was 
worth  much  more,  and  in  a  year  three  or  four 
times  as  much.  Goyernment  had  authorized  the 
construction  of  the  Union  Pacific  Kailroad,  and 
before  a  single  spade  of  earth  was  turned,  millions 
of  dollars  in  value  had  been  added  to  the  land.  It 
had  created  a  new  use  for  the  land.  Value  inheres 
in  use  when  the  thing  used  can  be  bought  and  sold. 
Whatever  creates  a  use  creates  value,  and  a  gi-eat 
increase  in  use  forces  an  increase  in  value,  pro- 
vided that  the  supply  does  not  increase  equally  fast ; 
and  with  silver  that  is  an  impossibility.  If  you 
think  government  cannot  add  value  to  a  metal, 
consider  this  conundrum  :  What  would  be  the 
present  value  of  gold  if  all  nations  should  de- 
monetize it  ?  It  can  be  calculated  approximately. 
There  is  on  hand  enough  gold  to  supply  the  arts 
for  forty  years  at  the  present  rate  of  consumption. 
What,  then,  is  the  present  value  of  a  commodity 
of  which  the  world  has  forty  years'  supply  on  hand 
and  all  prepared  for  immediate  use  ? 

Take  notice,  also,  that  in  the  decade   1850-60 
Germany,  Austria,  and    Belgium   completely  de- 


10  IF  NOT  SILVER,    WHAT? 

monetized  gold,  and  Holland  and  Portugal  par- 
tially did  so,  thus  depriving  it  of  its  legal  tender 
quality  among  70,000,000  people,  and  that  this 
added  very  greatly  to  its  then  depression. 

Free  coinage  would  bring  us  to  a  silver 
basis,  and  that  would  take  us  out  of  the  list 
of  superior  nations,  and  put  us  on  the  grade 
of  the  low-civilization  countries. 

That  is,  I  presume,  we  should  become  as  dirty 
as  the  Chinese,  and  as  unprogressive  as  the  Cen- 
tral Americans,  agnostics  like  the  Japanese,  and 
revolutionary  like  the  Peruvians.  And,  by  a 
parity  of  reasoning,  the  gold  standard  will  make 
us  as  fanatical  as  the  Turks,  as  superstitious  as 
the  Spaniards,  and  as  hot-tempered  and  revenge- 
ful as  the  Moors.  If  not,  why  not  ?  They  all 
have  the  gold  standard.  You  may  say  that  this 
answer  is  foolish,  and  I  don't  think  much  of  it 
myself,  but  it  is  strictly  according  to  Scripture 
(Proverbs  xxv.  5).  The  retort  is  on  a  par  with 
the  projiosition,  and  both  arc  claptrap.  The 
progress  of  nations  and  their  rank  in  civilization 
depend  on  causes  quite  aside  from  the  metal  basis 
of  their  money. 

We  must  remember  that  for  many  years  after 


OBJECTIONS  TO   SILVER.  11 

the  establishment  of  the  Mint  we  had  in  this 
country  little  or  no  coin  in  circulation  except 
silver,  and  were  just  as  much  on  a  silver  basis 
then  as  Mexico  is  now.  Were  our  forefathers, 
then,  inferior  to  us,  or  on  a  par  with  the  Mexicans 
and  Chinamen  of  the  present  day  ?  Even  down 
to  1840  the  silver  in  circulation  greatly  exceeded 
the  gold  in  amount. 

By  the  way,  where  do  you  goldites  get  the  fig- 
ures to  justify  you  in  creating  the  impression  on 
the  j)ublic  mind  that  Mexico  and  the  Central  and 
South  American  States  are  overloaded  with  silver, 
having  a  big  surplus  which  we  are  in  danger  of 
having  "  dumped "  on  us  ?  Didn't  you  know 
that  they  are  really  suffering  from  a  scarcity  of 
silver  ?  that  altogether  they  have  not  a  sixth  of 
what  wo  have  ?  One  who  judged  from  goldite 
talk  only,  would  conclude  that  silver  is  a  burden 
in  those  countries,  that  they  have  to  carry  it 
about  in  hods.     Now  what  are  the  facts  ? 

In  all  the  Spanish  American  States  there  are 
60,000,000  people,  and  they  have  a  little  less  than 
$100,000,000  in  silver.  Not  $2  per  capita  !  This 
is  a  startling  statement,  I  know,  but  it  is  official, 
and  you  will  find  it  in  the  last  report  of  the  Direc- 
tor  of  the   Mint   (1895).     Tlie  South  American 


12  IF   NOT   SILVER,    WHAT? 


States  have  but  83  cents  per  capita  in  silver,  and 
Mexico  has  but  14.50.  With  a  population  nearly 
twice  that  of  Great  Britain,  they  have  much  less 
silver,  and  less  than  half  of  that  of  Germany, 
though  having  a  much  larger  population.  In 
fact,  to  give  the  Spanish  American  nations  as 
large  a  silver  circulation  per  capita  as  the  average 
of  England,  France  and  Germany,  they  must 
needs  have  uearly  $300,000,000  more,  or  nearly 
three  times  as  much  as  they  now  have.  It  looks 
very  much  as  if  the  ''dump"  would  have  to  be 
the  other  way. 

From  these  figures  it  would  seem  that  the 
trouble,  if  monometallists  are  right  in  saying  there 
is  trouble  there,  is  due  not  to  their  having  too 
much  silver,  but  that  they  do  not  have  enough. 
Not  having  enough,  they  have  followed  the  usual 
course  of  nations  lacking  a  sufficient  coin  basis, 
and  have  issued  a  great  volume  of  irredeemable 
paper  money.  By  reference  to  the  authority 
above  cited,  you  will  find  tliat  they  have  in  cir- 
culation 1560,000,000  in  paper  money.  One  fourth 
of  all  the  uncovered  paper  in  the  world  is  in  those 
countries,  though  their  total  population  is  less 
than  that  of  the  United  States.  Who  will  say 
that  it  will  be  a  calamity  to  them  to  coin  $200,- 


OBJECTIONS   TO   SILVER.  18 

000^000  more  iu  silver  and  retire  that  much  of 
their  uncovered  paper  ? 

Gold  ought  to  be  the  standard  metal,  be- 
cause, apart  from  its  use  as  money,  it  has  a 
fixed  intrinsic  value. 

There  is  no  such  thing  as  intrinsic  value.  Qual- 
ities are  intrinsic  ;  value  is  a  relation  between  ex- 
changeable commodities,  and,  in  the  eternal  nat- 
ure of  things,  never  can  be  invariable.  Value  is 
of  the  mind ;  it  is  the  estimate  placed  upon  a 
salable  article  by  those  able  and  willing  to  buy  it. 
I  have  seen  water  sell  on  the  Sahara  at  two  francs 
a  bucketful.  Was  that  its  intrinsic  value  ?  If 
so,  what  is  its  intrinsic  value  on  Lake  Superior  ? 

Well,  if  what  you  say  be  true,  there  is  no 
intrinsic  value  in  any  of  the  precious  metals, 
and  we  cannot  have  an  invariable  standard 
of  value  at  all. 

No  more  than  an  invariable  standard  of  friend- 
ship or  love.  Value  is,  in  fact,  a  purely  ideal  rela- 
tion. All  this  talk  about  an  invariable  dollar  which 
shall  be  like  the  bushel  measure  or  the  yard  stick  is 
the  merest  claptrap.  The  fact  that  gold  men  stoop 
to  such  language  goes  far  to  prove  that  their  con- 


14  IF  NOT  SILVER,    WHAT? 

tention  is  wrong.  The  argument  violates  the  very 
first  principle  of  mental  philosophy,  in  that  it  ap- 
plies the  fixed  relations  of  space,  weight,  and  time 
to  the  operations  of  the  mind.  Would  you  say  a 
bushel  of  discontent  or  eighteen  inches  of  friend- 
ship ?  Men  who  compare  the  dollar  to  the  pound 
weight  or  yard  stick  are  talking  just  that  unscien- 
tifically. Invariable  value  being  an  impossibility, 
and  an  invariable  standard  of  value  a  correlative 
impossibility,  all  we  can  do  is  to  select  those  com- 
modities which  vary  the  least  and  use  them  as  a 
measure  for  other  things  ;  but  you  will  not  find  in 
any  economic  writer  that  any  metal  is  a  fixed  stan- 
dard. And  this  brings  me  to  consider  that  singu- 
lar piece  of  folly  which  furnishes  the  basis  of  so 
much  monometallist  literature,  namely,  that  gold 
is  less  variable  in  value  than  silver,  and  that  one 
metal  as  a  basis  varies  less  than  two.  Some  of  our 
statesmen  have  got  themselves  into  such  a  condition 
of  mind  on  this  point  as  to  really  believe  that,  while 
all  other  products  of  human  labor  are  changing  in 
value,  gold  alone  is  gifted  with  the  great  attribute 
of  God — immutability.  It  is  sheer  blasphemy.  It 
is  conclusively  proved,  and  by  many  different  lines 
of  reasoning,  that  silver  is  many  times  more  stable 
in  value  than  gold. 


OBJECTIONS  TO   SILVER.  15 

I  never  heard  such  a  proposition  in  my  life ! 
How  on  earth  can  it  be  proved  that  silver,  as 
things  now  stand,  has  not  changed  in  value 
more  than  gold  ? 

By  the  simplest  of  all  processes.  If  we  were  in 
a  mining  country,  I  could  easily  prove  it  to  you  by 
the  observed  facts  of  geology,  mineralogy,  and  me- 
tallurgy ;  but  that  is  perhaps  too  remote  and  scien- 
tific, so  we  will  take  the  range  of  prices  since  silver 
was  demonetized.  Of  course  you  have  seen  the 
various  tables,  such  as  Soetbeer's  and  Mulh  all's. 
Take  their  figures,  or,  better  still,  take  those  of  the 
United  States  Statistical  Abstract,  and  you  will 
find  the  following  facts  demonstrated  : 

In  February,  1873,  a  ten-ounce  bar  of  uncoined 
silver  sold  in  New  York  city  for  $13  in  gold,  or 
$14. 82  in  greenbacks.  To-day  the  ten-ounce  bar 
sells  there  for  $G.  90. 

'"Awful  depreciation,"  isn't  it?  '"Debased 
money,"  and  all  that  sort  of  thing.  But  hold  on. 
Let  us  see  how  it  is  with  other  things.  For  prices 
in  the  first  half  of  1873  we  will  take  the  United 
States  Abstract,  and  for  present  prices  to-day's 
issue  of  the  New  York  Tribune.  Wheat  then  was 
$1.40  in  New  York  city,  so  our  silver  bar  would 
have  brought  ten  and  four-sevenths  bushels ;  to-day 


16  IF   NOT  SILVER,    WHAT? 


wheat  is  "unsteady"  in  the  near  neighborhood 
of  64  cents,  and  our  silver  bar  would  buy  ten  and 
five-sixths  bushels.  No.  2  red  is  the  standard  in 
both  cases. 

Going  through  a  long  list  in  the  same  manner, 
we  find  that  the  ten-ounce  bar  of  uncoined  silver 
would  buy  in  '73,  in  'New  York  city,  twenty-three 
and  a  half  bushels  of  corn,  to-day  twenty-four 
bushels ;  of  cotton  then  eighty  pounds,  to-day 
eighty-six  pounds — and  there  is  "  a  great  specula- 
tive boom  in  cotton,'"  and  has  been  for  some  time, 
but  on  the  average  price  of  this  year  silver  would 
buy  much  more.  Of  rye,  then  about  fifteen  bush- 
els (grading  not  well  settled),  to-day  thirteen  bush- 
els ;  of  bar  iron  then  310  pounds,  to-day  460 
pounds,  and  so  on  through  the  market.  In  the 
Central  West  in  1873  it  would  have  taken  ten  such 
silver  bars  to  buy  a  standard  farm  horse,  Clydes- 
dale or  Percheron-Norman. 

Will  it  take  anymore  bars  to-day  at  $6.90  each  ? 

There  is  another  way  to  calculate  the  decline, 
and  that  is  by  taking  the  average  farm  value  in- 
stead of  the  export  or  New  York  city  price,  and  in- 
cluding all  roots  and  garden  products  not  exported, 
and  this  makes  the  showing  far  more  favorable  to 
silver.    The  Agricultural  Deijartment  at  Washing- 


OBJECTIONS   TO   SILVER.  17 

ton  has  recently  issued  a  pamphlet  showing  the 
crops  of  every  year  since  1870,  and  the  average  home 
or  farm  jDrice,  together  with  the  total  for  which  the 
whole  crop  was  sold.  Send  for  it  and  contrast  the 
jirices  given  in  it  with  those  known  to  you  to-day, 
and  you  will  find  that  in  rye,  barley,  oats,  potatoes, 
and  many  other  things  the  decline  has  been  very 
much  greater  than  is  given  above.  In  short,  it 
takes  more  farm  produce  to  buy  an  ounce  of  silver 
than  it  did  in  1873,  and  twice  as  much  to  buy  an 
ounce  of  gold.  Of  Ohio  medium  scoured  wool,  for 
instance — and  that  is  the  standard  wool  of  the 
market — it  would  have  taken  in  1873  two  and  a 
half  pounds  to  have  bought  an  ounce  of  silver, 
while  to-day  it  will  take  considerably  over  three 
pounds.  The  monometallists  habitually  talk,  and 
have  talked  it  so  long  that  they  believe  it  them- 
selves, as  if  silver  had  become  so  cheap  that  the 
farmer  ought  to  rank  it  with  tin,  lead,  or  spelter ; 
but  if  the  farmer  will  try  the  experiment  he  will 
find  that  it  takes  a  good  deal  more  of  his  product 
to  buy  a  given  amount  of  silver  than  it  did  in  1873. 
The  plain  truth  of  the  matter  is  that  the  time 
has  come  for  both  gold  and  silver  to  increase  in 
purchasing  power  ;  but  by  reason  of  demonetiza- 
tion almost  the  entire  increase  has  been  concen- 
2 


18  IF  NOT  SILVER,   WHAT? 

trated  in  gold,  leaving  silver  almost  stationary  as 
to  commodities  in  general,  but  somewhat  enhanced 
as  to  farm  products.  In  the  name  of  common 
honesty,  is  it  not  a  high-handed  outrage  to  maiie 
the  old  debts  of  that  period  payable  in  the  rapidly 
appreciating  metal,  instead  of  one  that  has  merely 
retained  its  value  ?  and  is  it  not  hypocrisy  to  speak 
of  such  a  system  as  "  honest  money,''  and  affect 
to  deplore  the  dishonesty  of  those  who  insist  upon 
their  right  to  pay  in  the  least  variable  metal, 
which  was  constitutional  and  the  unit  of  our 
money  from  the  very  start  ? 

We  certainly  do  want  to  pay  our  debts  in 
honest  money. 

Gospel  truth  !  And  there  is  but  one  kind  of 
perfectly  honest  money — that  which  will  give  the 
creditor  an  equivalent  in  commodities  for  what  he 
could  have  bought  Avith  the  money  he  loaned. 
Surely  no  honest  man  Avill  pretend  that  gold  to- 
day does  that.  At  this  point  we  must  admit  the 
painful  truth  that,  in  that  sense,  there  is  no  per- 
fectly honest  money,  that  is,  no  money  that  does 
not  change  somewhat  in  purchasing  power;  and 
how  to  remedy  tliis  has  been  the  great  problem 
with  the  greatest  minds  among  financiers — with 


OBJECTIONS   TO   SILVEB.  19 

all  financiers,  in  fact,  who  are  more  anxious  for 
justice  than  greedy  of  gain.  But  surely  there 
should  not  be  added  to  an  innate  variability  that 
much  gi-eater  variability  due  to  the  mischievous 
interference  of  interested  parties,  through  the 
power  of  the  government.  And  herein  is  made 
manifest  the  reckless  folly  of  the  gold  men  in 
fighting  against  the  soundest  conclusions  of  science 
and  honesty,  in  striving  for  a  standard  of  one 
metal  allowing  the  greatest  variation,  instead  of 
two  which  by  varying  in  different  directions  might 
counteract  each  other. 

Gold  alone  has  varied  in  production  in  this  cen- 
tury from  115,000,000  to  1150,000,000  per  year, 
or  tenfold  ;  but  gold  and  silver  combined  have 
never  varied  more  than  sixfold.  It  is  self  evident, 
therefore,  that  the  two  combined  form  a  much 
more  stable  mass  than  gold  alone,  and  it  cannot 
be  too  often  repeated  that  the  great  desideratum 
in  money,  the  one  quality  more  important  than 
all  others,  is  stability  in  value,  to  the  end  that  a 
dollar  or  pound  or  franc  may  command  as  nearly 
as  possible  the  same  amount  of  commodities  when 
a  contract  is  completed  as  when  it  is  made. 
Economists  dispute  about  almost  everything  else, 
but  they  are  unanimous  in  this  :  That  a  money 


20  IF   NOT   SILVER,    WHAT? 

which  changes  rapidly  in  purchasing  power  is  de- 
structive of  all  stability  and  even  of  commercial 
morality.  Will  anybody  pretend  that  gold  has  not 
changed  rapidly  in  purchasing  power  within  the 
last  twenty  years  ?  Has  not  tbe  universal  expe- 
rience shown  that  the  variation  has  been  very 
much  greater  in  one  metal  than  it  ever  was  when 
the  two  metals  were  treated  equally  at  the  mint  ? 
The  very  least  that  could  be  asked  on  the  score  of 
honesty  would  be  free  coinage  of  both,  with  a  pro- 
viso that  debts  should  be  paid  with  one-half  of 
each.  Back  of  all  that,  however,  comes  in  the 
great  principle  of  compensatory  action,  the  varia- 
tion of  one  metal  counteracting  that  of  the  other ; 
and  from  the  standpoint  of  pure  science  and  hon- 
esty it  is  greatly  to  be  regretted  that,  instead  of 
two  precious  metals,  we  have  not  at  least  five. 

The  market  reports  do  indeed  show  an 
unprecedented  decline  in  the  prices  of  farm 
products,  except  in  a  few  articles  such  as 
butter,  eggs,  and  poultry,  in  places  where 
increased  population  counteracts  the  ten- 
dency to  greater  cheapness  ;  but  this  decline 
is  due  to  increased  invention,  and  the  great 
cheapening  in  transportation. 


OBJECTIONS   TO   SILVER.  21 

How  mucli  of  it  ?  The  records  of  the  Patent 
Office  show,  and  the  experience  of  farmers  con- 
firms it,  that  all  the  improvements  in  farm  ma- 
chinery since  1870  have  not  reduced  the  labor 
cost  of  farm  produce  on  tlie  general  average  more 
than  2k  per  cent.  Here  is  a  little  paradox  for  you 
to  study.  In  the  twenty-five  years  from  1845  to 
1870  the  progress  of  invention  in  farm  machinery 
was  greater  than  in  all  the  previous  history  of  the 
world,  marvellously  rapid,  in  fact,  and  during  those 
years  the  farm  price  of  the  produce  steadily  in- 
creased ;  but  in  the  ensuing  twenty-five  years  to 
1895  there  were  very  few  improvements,  and  the 
price  has  declined  with  steadily  increasing  speed. 
This  fact  is  either  iguorantly  or  skilfully  evaded 
by  Edward  Atkinson  and  David  A.  Wells  in  their 
elaborate  articles  on  the  subject ;  so  I  will  present 
some  facts  and  figures  which  were  obtained  early 
this  year  in  the  Patent  Office,  and  carefully  veri- 
fied by  members  of  Congress  from  every  portion  of 
the  farming  regions. 

Since  1795  there  have  been  granted  6,700 
patents  for  plows,  but  since  1870  there  have 
been  but  three  really  valuable  improvements. 
Farmers  are  divided  in  opinion  as  to  whether 
the   riding    plow   reduces   the  labor  cost.      The 


22  IF  NOT   SILVER,    WHAT? 

lister,  recently  patented,   throws  the  earth  into 
a  ridge  and  enables  the  farmer  to  plant  without 
previously  breaking  the  soil.     It  is  valuable  in  the 
dry  regions  of  the  West,   but  useless  where  the 
rainfall  is  great,  as  the  soil  must  there  be  broken 
up  anyhow.     There  have  been  920  corn  gatherers 
patented,  of  which  only  one  is  considered  a  suc- 
cess, and  most  farmers  reject  it  on  account  of  the 
waste.     The  general  verdict  is  that  the  labor  of 
producing  corn  has  been  reduced  very  little,  if 
any.     In  the  labor  of  producing  potatoes  there 
has  been  no  reduction  whatever,  nor  in  the  finer 
garden  products,  nor  in  fruits.     It  takes  the  same 
labor  to  produce  a  fat  hog  or  a  fat  ox,  a  sheep, 
horse,    or  mule,    as   in   1870.     In  wool   growing 
many  patents  have  been  taken  out  for  shearers, 
and  three  of  them  are  said  to  be  savers  of  labor, 
provided  the  wool   grower  is  so  situated  that  he 
can  attach  the  shearer  to  a  horse  or  steam  power. 

There  have  been  since  the  opening  of  the  Office 
C,620  jMtents  for  harvesters,  of  which  the  only 
great  improvement  since  1870  is  the  twine  binder, 
for  which  over  900  patents  have  been  taken  out. 
The  beheader  is  used  in  California,  as  it  was  be- 
fore 1870,  and  in  the  prairie  regions  the  slieaf- 
carrier  has  recently  been  introduced,  holding  the 


OBJECTIONS  TO   SILVER. 


23 


sheaves  until  enough  are  collected  to  make  a 
shock.  Counting  the  labor  of  the  men  who  did 
the  binding  after  the  original  McCormick  reaper 
at  $2  per  day,  the  total  saving  by  all  these 
improvements  since  1870  is  estimated  at  6  cents 
per  bushel  for  wheat,  rye,  and  oats.  Much  of 
this  saving  in  labor  is  neutralized  by  cost  of 
machines,  interest,  and  repairs.  There  have  been 
nearly  3,000  patents  in  fences,  over  5,000  in  the 
making  of  boots  and  shoes,  and  in  stoves  and 
heaters  8,340,  none  affecting  farm  labor  except 
the  first.  In  cotton  growing  exactly  the  same 
processes  are  used,  from  planting  to  picking,  as 
in  1850  ;  but  out  of  many  hundred  attempts  to 
invent  a  cotton  picker  it  is  now  claimed  that  one 
is  a  success,  though  it  has  not  yet  got  into  use. 
The  cost  of  ginning  the  cotton  has  been  reduced 
about  two-fifths  of  a  cent  per  pound.  There  have 
been  176  patents  for  saw  gins,  63  for  roller  gins, 
and  47  for  feeders  to  gins,  out  of  all  of  which 
there  has  been  a  new  gin  evolved  which  will  be 
in  use  hereafter.  I  might  thus  go  around  the 
list,  but  enough  has  been  said  to  show  that  nearly 
all  our  farm  machinery  was  in  use  before  1870, 
and  that  since  that  date,  as  I  said,  the  reduction 
of  labor  cost  has  not  upon  the  whole  field  ex- 


24  IF   NOT   SILVER,    WHAT? 

ceeded  2^  per  cent.  The  assertion  that  reduced 
transportation  lowers  the  farm  price  is  in  flat  con- 
tradiction of  political  economy,  as,  according  to 
that,  the  benefits  should  be  divided  between  pro- 
ducer and  consumer,  the  farm  price  rising  and 
the  city  or  export  price  declining. 

The  price  of  what  the  farmer  has  to  buy 
has  declined  in  equal  if  not  greater  ratio, 
and  so  his  margin  is  as  great  as  ever. 

It  is  evident  that  you  are  not  a  practical 
farmer.  However,  your  non-acquaintance  with 
the  figures  is  not  to  be  wondered  at  when  we 
consider  what  has  been  said  by  great  scholars  and 
statesmen.  I  recently  heard  a  politician,  and  one 
of  perfectly  Himalayan  greatness,  say  in  debate 
that  a  day's  work  on  an  Illinois  farm  would  now 
produce  more  than  twice  as  much  as  in  1870,  and 
another  clinched  it  by  adding  that  a  man  could 
pay  for  a  good  farm  by  his  surplus  from  five  years' 
crops.  Now  go  to  some  practical  farmer  and  get 
him  to  make  the  calculation,  and  you  will  find 
that  what  he  has  saved  by  reduced  prices  is  less 
than  one-fifth  of  what  he  has  lost  from  the  same 
cause.  The  average  farm  family  in  the  central 
West  consists  of  five  persons,  and  their  greatest 


OBJECTIOKS  TO   SILVER.  25 

saving  has  been  on  clothing.  You  may  set  that 
at  $30  per  year.  The  next  is  in  sugar,  for  which 
they  pay  but  half  the  price  of  1873.  There  is  no 
other  item  that  will  reach  $5,  not  even  including 
all  the  iron  or  steel  they  have  to  buy  in  a  year. 
The  largest  estimate  of  gains,  unless  they  go  into 
luxuries,  does  not  exceed  $90  per  year.  At  least 
a  third  of  this  gain  is  offset  by  increased  taxes. 

Now  let  us  see  what  this  farm  family  has  lost, 
counting  only  the  price  of  the  surplus  it  sells  and 
taking  our  average  from  the  official  rej)orts.  On 
500  bushels  of  wheat,  at  least  1250  ;  on  600  bushels 
of  corn,  $120 ;  on  ten  tons  of  hay,  $30 ;  on  rye, 
oats,  potatoes,  and  so  forth,  $50  ;  on  three  horses 
and  mules  sold  per  year,  $100.  Total,  $550,  being 
more  than  ten  times  the  net  gain  over  taxes. 

The  Agricultural  Department  figures  indicate 
that,  taking  the  United  States  as  a  whole,  includ- 
ing even  the  intensive  farming  near  the  cities,  the 
reduction  of  annual  income  is  a  few  cents  over  $6 
per  acre.  Thus  something  like  $1,800,000,000 
has  been  taken  from  the  farmers'  annual  income, 
and  the  farmer  being  just  like  any  other  man,  in 
that  he  cannot  spend  money  that  he  does  not  get, 
this  withdraws  $1,800,000,000  from  the  manufac- 
turers' and  general  market.     In  view  of  these  fig- 


26  IF  NOT   SILVER,    WHAT? 

ures — and  if  anything  I  have  understated  them — 
■what  conceivable  good  would  a  raise  in  the  tariff 
do  the  manufacturers  so  long  as  our  farmers  must 
sell  on  a  gold  basis  and  be  subject  at  the  same 
time  to  the  rapidly  increasing  competition  of  sil- 
ver basis  countries  ?  I  have  said  nothing  of  fixed 
charges  which  do  not  decline,  or  of  the  cost  of  the 
federal  government,  which  steadily  and  rapidly  in- 
creases. Have  you  heard  of  any  decline  in  official 
salaries,  taxes,  debts,  bonds,  or  mortgages  ? 

That  is  plausible  at  first  view,  but  it  can- 
not be  true  as  to  the  country  generally,  be- 
cause wages  have  risen  ;  or  at  least  they 
had  risen  continuously  till  1892,  as  is  clearly 
shown  in  the  Aldrich  Report. 

The  Aldrich  Eeport  is  a  miserable  fraud.  It 
does  not  so  much  as  mention  farmers  and  planters 
or  any  of  the  laboring  classes  immediately  depen- 
dent on  farmers.  It  gives  only  the  wages  of  the 
highest  class  of  skilled  laborers  and  in  those  trades 
only  where  the  men  are  organized  in  ironbound 
trades  unions  which  force  up  the  wages  of  their 
members.  Take  the  lists  and  census  and  add  the 
numbers  employed  in  every  trade  mentioned  in 
that  report,  and  you  will  find  that  all  together 


OBJECTIONS  TO   SILVER.  27 

they  only  amount  to  one  fourth  the  number  of 
farmers,  or  about  12  per  cent,  of  the  labor  of  the 
country.  Furthermore,  it  takes  no  account  what- 
ever of  the  immense  percentage  of  men  in  each 
trade  who  are  out  of  employment.  One  who 
didn't  know  better  would  conclude  from  it  that 
our  coal  miners  worked  300  days  in  the  year,  and 
that  stone  masons,  plasterers,  and  the  like  worked 
all  the  year  in  the  latitude  of  New  York  and  Chi- 
cago. And  these  are  but  a  few  of  the  tricks  and 
absurdities  of  the  report. 

Wages  are  labor's  share  of  its  own  product. 
The  claim  that  wages  generally  can  rise  on  a  de- 
clining market  involves  a  flat  contradiction  of 
arithmetic  ;  it  assumes  that  the  separate  factors 
can  increase  while  the  sum  total  is  decreasing,  and 
that  the  operator  can  pay  more  while  he  is  every 
day  getting  less.  The  whole  philosophy  of  the 
subject  was  admirably  summed  up  by  a  Southern 
negro  with  whom  I  recently  talked.  '*  If  wages 
be  up,  how  come  ^em  up  ?  We  all's  gittin'  but 
half  what  we  useter  git  for  o^^r  cotton,  and  how 
kin  five  cents  a  pound  pay  me  like  ten  cents  a 
pound,  and  me  a  pickiu'  out  no  mo'  cotton  ?" 
His  philosophy  applies  to  60  per  cent,  of  all  the 
working  people  in  the  United  States,  for  that  pro- 


28  IF   NOT   SILVER,    WHAT? 

portion  do  not  work  for  money  wages.  They  pro- 
duce, and  what  they  sell  the  product  for  is  their 
wages.  Viewed  in  this,  the  only  true  light,  the 
wages  of  60  per  cent,  of  our  laborers  have  declined 
nearly  one  half,  making  the  average  decline  for 
all  laborers  nearly  a  third.  How,  indeed,  could  it 
be  otherwise  ?  Will  any  sensible  man  believe  that 
a  farmer  could  pay  men  as  much  to  produce  wheat 
at  1.50  as  at  $1.50  ?  Or  take  the  case  of  the  cotton 
grower.  It  takes  a  talented  negro  to  make  and 
save  3,000  pounds  of  lint  cotton  ;  when  he  sold  it 
at  $.10  he  got  $300,  and  when  he  sells  it  at  $.05  he 
gets  $150,  and  all  the  tricks  of  all  the  goldbugs  in 
the  world  cannot  make  it  otherwise.  To  tell  such 
men  that  their  wages  have  increased,  in  the  face 
of  what  they  know  to  be  the  facts,  is  arrogant  and 
insulting  nonsense. 

This  nation  should  have  the  best  money 
in  the  world. 

Very  true.  And  the  question  of  what  is  the 
best  can  only  be  determined  by  science  and  expe- 
rience. It  is  certain  that  gold  standing  alone  is 
not ;  for  its  fluctuations  in  purchasing  power  have 
been  so  tremendous  as  again  and  again  to  throw 
the    commercial   world    into    jimjams.      History 


OBJECTIONS  TO   SILVER.  29 

shows  tliat  it  lias  yaried  100  per  cent,  in  a  cen- 
tury, and  we  have  seen  in  this  country  that  its 
value  declined  about  25  per  cent,  from  1848  to 
1857,  and  that  it  has  increased  something  like  60 
per  cent,  since  1873.  Without  desiring  to  be  ill- 
natured,  I  must  say  it  seems  to  me  that  a  man 
has  a  queerly  constituted  mind  who  insists  that 
that  is  the  only  *' honest  money.^ 


» 


But  we  don't  want  50-cent  dollars. 

And  you  can't  have  'em,  my  dear  sir.  A  dollar 
consists  of  100  cents.  The  phrase  *'  50-cent  dol- 
lar" and  that  other  phrase  *' honest  money ''re- 
mind me  of  what  I  used  to  hear  in  my  boyhood 
when  the  slavery  question  was  debated  with  such 
heat :  "  What !  Would  you  want  your  sister  to 
marry  a  nigger  ?  Whoosh  !  "  It  was  assumed,  if 
a  man  denounced  slavery,  that  he  wanted  the  col- 
ored man  for  a  brother-in-law.  Men  who  employ 
such  phrases  show  a  secret  consciousness  of  having 
a  weak  cause.  And  while  I  am  about  it  I  may  as 
well  add  that  I  do  not  admire  the  way  some  of  our 
fellows  have  of  denouncing  gold  as  "British 
money."  Great  fools,  indeed,  the  British  would  be 
if  they  did  not  fight  for  a  gold  basis,  for  by  reason 
of  it  they  get  twice  as  much  of  our  wheat,  meat. 


30  IF  NOT  SILVER,    WHAT? 

and  cotton  for  the  $200,000,000  per  year  we  have 
to  pay  them  in  interest.  According  to  the 
Chancellor  of  the  Exchequer,  the  world  owes  Eng- 
land $12,000,000,000,  on  which  she  realizes  a  little 
over  four  and  a  half  j^er  cent.,  or  pretty  nearly 
1600,000,000  per  year.  Fully  that,  if  we  add  in- 
come from  property  her  citizens  own  in  this  and 
other  countries.  On  the  day  we  demonetized  sil- 
ver, that  $600,000,000  could  have  been  paid  in 
gold  in  the  port  of  New  York  with  450,000,000 
bushels  of  wheat ;  to-day  it  would  take  900,000,- 
000  bushels.  In  short,  the  amount  of  grain  Eng- 
land has  made  clear  because  of  the  rest  of  the 
"vvorld  adopting  monometallism  would  bread  all 
her  people,  feed  all  her  live  stock,  and  make  three 
gallons  of  whiskey  for  every  person  on  the  island. 
Why  shouldn't  they  take  what  the  world  willingly 
gives  them  ?  I  have  my  opinion,  however,  of  the 
common  sense  of  a  world  which  does  things  that 
way. 

We  want  money  that  is  equally  good  all 
over  the  world. 

There  is  no  such  money.  The  coin  we  send 
abroad  is  only  bullion  when  it  gets  there,  and  most 
dealers  prefer  government   bars.     The   exchange 


OBJECTIONS  TO   SILVER.  31 

must  be  calculated  exactly  the  same  whether  we 
use  gold,  silver,  or  paper  in  our  domestic  trade ; 
and  this  notion  that  we  ''should  be  at  a  disadvan- 
tage in  the  exchange"  is  a  delusion.  The  vari- 
ations in  the  value  of  the  greenback  during  our 
war  era  were  calculated  daily,  and  prices  in  this 
country  rose  or  fell  to  correspond.  It  must,  I 
say,  be  calculated  just  the  same  in  gold  or  silver, 
and  any  smart  schoolboy  can  do  it  in  a  minute  on 
any  transaction. 

What  I  mean  is  that  the  silver  dollar  is 
worth  only  50  cents  in  gold. 

And  by  the  same  token  the  gold  dollar  is  worth 
200  cents  in  silver.  The  answer  is  as  logical  as 
the  quip,  and  neither  is  worth  notice.  Such  a 
process  merely  assumes  an  arbitrary  standard  and 
measures  all  other  things  by  it,  as  the  drunkard 
in  a  certain  stage  of  intoxication  thinks  that  his 
company  is  drunk  while  he  is  duly  sober.  And, 
by  the  way,  where  do  you  get  your  moral  right  to 
say  that  a  dollar  which  wdll  buy  two  bushels  of 
wheat  or  twenty  pounds  of  cotton  is  any  more 
honest  than  one  which  will  buy  one  bushel  or  ten 
pounds  ?  Is  it  because  with  the  dear  dollar  the 
farmer  must  work  twice  as  long  to  pay  off  a  mort- 


32  IF  NOT   SILVER,    WHAT? 


gage,  that  the  interest  paid  on  the  great  debts  of 
the  world  will  buy  twice  as  much,  and  the  debtor 
nations  are  put  at  a  terrible  disadvantage  as  to  the 
creditor  nations  personally?     Is  that  honest  ? 

A  very  safe  test  of  any  theory  is  to  follow  it  to 
its  logical  conclusion.  Take  your  "  honest " 
money  argument,  on  the  basis  of  twenty  years' 
experience,  and  see  where  it  will  take  you  in  the 
near  future.  The  dollar  which  buys  two  bushels 
of  wheat  or  sixteen  pounds  of  cotton  is  '^  honest," 
you  say,  and  a  dollar  which  buys  but  one  bushel 
or  eight  pounds  is  not.  By  and  by,  if  your 
fallacy  prevails,  the  dollar  will  buy  three  bushels 
of  wheat  or  twenty-five  pounds  of  cotton,  and  will 
then,  by  your  reasoning,  be  much  more  '"honest" 
than  now.  Is  that  your  idea  ?  How  much  lower 
must  prices  go  before  you  will  admit  that  gold  has 
gained  in  purchasing  power  ? 

But  it  cannot  be  that  prices  have  fallen 
because  of  the  scarcity  of  money,  for  the  low 
rate  of  interest  now  prevailing  proves  that 
money  is  abundant  and  cheap. 

That  is  a  very  old  fallacy,  and  a  singularly  tena- 
cious one,  as  it  seems  that  no  amount  of  experi- 
ence drives  it  from  the  minds  of  men.     Look  over 


OBJECTIONS   TO   SILVER.  83 

the  history  of  our  panics  and  you  will  find  that 
after  the  first  convulsion  is  past  the  banks  are  soon 
crowded  with  idle  money,  and  the  rate  of  interest 
falls.  Take  notice,  however,  that  the  money  lend- 
ers always  declare  that  they  must  have  "gilt- 
edged  paper.'"'  Interest  on  first-class  securities  is 
never  lower  than  in  the  hardest  times  which  fol- 
low a  particularly  severe  panic,  and  the  reason  is 
obvious  :  all  far-seeing  business  men  know  that 
prices  are  likely  to  fall,  and,  consequently,  invest- 
ments become  unprofitable  :  therefore  they  do  not 
invest ;  therefore  they  do  not  want  money  ;  there- 
fore they  do  not  borrow,  and  idle  money  accumu- 
lates. This  is  a  phenomenon  always  observed  in 
hard  times.  In  good  times,  on  the  contrary, 
when  investments  are  reasonably  sure  to  be  profit- 
able, there  is  naturally  an  increased  demand  for 
money,  and  so  the  rate  of  interest  rises.  As  a 
matter  of  fact,  however,  interest  rates,  when 
properly  estimated,  have  been  for  several  years 
past  very  much  higher  than  previously — that  is, 
the  borrower  has,  in  actual  value,  paid  very  much 
more ;  so  rapid  has  been  the  increase  of  the  pur- 
chasing power  of  money,  that  the  six  per  cent,  now 
paid  on  a  loan  will  buy  more  than  the  ten  per 
cent,  paid  a  few  years  ago.     In  addition  to  that. 


34  IF   NOT   SILVER,    WHAT"? 

the  value  of  the  loan  has  been  steadily  increasing. 
Make  a  calculation  for  either  of  the  years  since 
1890,  and  you  will  find  it  to  be  something  like 
this  :  the  six  per  cent,  paid  as  interest  has  the  pur- 
chasing power  of  at  least  ten  per  cent,  a  few 
years  ago,  and  the  lender  has  gained  at  least  two 
per  cent,  a  year,  if  not  twice  that,  by  the  increased 
value  of  his  money ;  so  the  borrower  will  have 
paid,  at  the  maturity  of  his  obligation,  at  least 
twelve  per  cent,  per  annum,  and  probably  much 
more. 

The  silent  and  insidious  increase  of  their  obli- 
gations, by  reason  of  the  enhanced  and  steadily 
enhancing  value  of  gold,  has  ruined  many  thou- 
sands of  business  men  who  are  even  now  uncon- 
scious of  the  real  cause  or  of  the  power  that  has 
destroyed  them. 

I  may  add  in  this  connection  that  the  three  per 
cent,  now  paid  on  a  United  States  bond  is  worth 
about  as  much  in  commodities  as  the  six  per  cent. 
paid  previous  to  1870,  and  at  the  same  time  the 
bond  has  doubled  in  value  for  the  same  reason  ; 
thus,  calculated  on  the  basis  of  twenty-five  years, 
the  bondholder  is  really  receiving,  or  has  received, 
the  equivalent  of  ten  per  cent,  interest. 


DEMONETIZATION  OF   GOLD. 

Gold  has  an  intrinsic  value,  says  the  mono- 
metallist,  which  makes  it  the  money  of  the  world. 
It  is  sound  and  stable,  while  silver  fluctuates.  See 
how  much  more  silver  an  ounce  of  gold  will  buy 
than  in  1873,  but  the  gold  dollar  remains  the 
same,  worth  its  face  as  bullion  anywhere  in  the 
world. 

But  suppose  there  had  been  a  general  demoneti- 
zation of  gold  instead  of  silver,  how  would  the 
ratio  have  stood  then  ?  Would  not  the  same  rea- 
soning prove  silver  unchangeable,  and  gold  the 
fluctuating  metal  ? 

Oh,  nonsense  !  it  is  impossible  to  demonetize 
gold,  because  the  civilized  world  recognizes  it  as 
an  invariable  standard  by  which  all  commodities 
are  measured  in  value.  The  supposition  is  absurd. 
It  would  be  very  much  like  deoxygenizing  the  air. 

But,  my  dear  sir,  gold  has  been  demonetized, 
and  not  very  long  ago,  either,  and  very  extensive- 
ly, too.  It  was  deprived  of  its  legal  tender  qual- 
ity by  four  great  nations,  comprising  some  seventy 


36  IP  NOT   SILVER,    WHAT? 

million  people  ;  demonetized  because  it  was  cheap 
and  because  the  world^s  creditors  believed  it  was 
going  to  be  cheaper  ;  the  demonetization,  so  far 
as  it  went,  produced  enormous  evils,  and  nothing 
but  the  firmness  of  France  and  the  far-seeing 
wisdom  of  her  financiers  prevented  the  demonetiza- 
tion becoming  general  on  the  continent  of  Europe, 
which  would  have  reversed  the  present  position  of 
the  two  metals  in  the  public  mind. 

Of  the  many  singular  features  in  the  present 
overheated  controversy,  probably  the  most  singular 
is  the  fact  that  comparatively  few  bimetallists  know 
of,  or,  at  any  rate,  say  much  about,  this  demoneti- 
zation of  gold,  while  the  monometallists  ignore  it 
entirely,  and  many  of  them,  who  ought  to  know 
better,  absolutely  deny  it. 

So  extensive  was  this  demonetization  of  gold, 
and  so  far-reaching  were  its  consequences,  that  it 
may  easily  be  believed  that  it  was  the  beginning  of 
all  our  misfortunes,  and  that  the  crime  of  the  cen- 
tury, instead  of  being  the  demonetization  of  silver 
in  1873,  was  really  the  demonetization  of  gold  in 
1857  ;  for  that  was  the  first  general  or  preconcerted 
international  action  to  destroy  the  monetary  func- 
tions of  one  of  the  metals  and  throw  the  burden 
upon  the  other,  and  it  first  familiarized  the  minds 


DEMONETIZATION    OF   GOLD.  37 

of  financiers,  and  especially  of  the  creditor  classes, 
with  the  fact  that  the  thing  might  easily  be  done 
and  that  it  would  work  enormously  to  their  advan- 
tage. 

It  may  also  be  said  that  it  led  logically  to  the 
action  of  1867,  which  was  but  the  beginning  of  a 
general  demonetization  of  silver. 

The  history  of  gold  demonetization  is  full  of 
instruction  and  is  here  given  in  detail. 

In  1840-45  the  world  was  hungering  for  gold. 
All  the  leading  nations  had  just  passed  through 
financial  convulsions  which  shook  the  very  foun- 
dations of  society.  Several  American  states  had 
either  repudiated  their  debts  outright  or  scaled 
them  in  ways  that  to  the  English  mind  looked  dis- 
honest, and  there  was  a  general  uneasiness  among 
the  creditor  classes  of  the  world.  A  universal  fall 
of  prices  had  produced  the  same  results  with  which 
we  are  now  so  painfully  familiar.  In  the  half 
century  terminating  with  1840  the  world  had  pro- 
duced but  $529,942,000  in  gold,  coinage  value,  and 
11,364,697,000  in  silver,  or  some  forty  ounces  of 
silver  to  one  of  gold  ;  yet  their  ratio  of  values  had 
varied  but  little,  and  the  variation  was  not  increas- 
ing. Why  ?  Mouometallists  have  raked  the  world 
in  vain  for  an  answer.     Bimetallists  point  to  the 

386396 


38  IF  NOT  SILVER,   WHAT? 

only  one  that  is  satisfactory,  namely,  the  persist- 
ence of  France  in  treating  both  metals  equally  at 
her  mints.  But  there  were  grave  apprehensions 
that  France  alone  could  not  maintain  the  parity, 
and  so,  as  aforesaid,  all  the  world  was  hungry  for 
gold. 

And  in  all  the  world  there  was  not  one  observer 
who  dreamed  that  this  hunger  would  soon  be  far 
more  than  satiated,  and  the  philosopher  who  should 
have  predicted  half  of  what  was  soon  to  come 
would  have  been  jeered  at  as  a  crazy  optimist.  In 
1848  gold  was  discovered  in  California,  and  three 
years  later  in  Australia.  The  sujjply  from  Africa 
and  the  sands  of  the  Ural  Mountains  had  previ- 
ously increased,  so  that  in  1847-8  it  was  equal  to 
that  of  silver.  But  how  trifling  was  this  increase 
to  what  followed.  In  1849  there  was  still  a  slight 
excess  of  silver  production,  and  in  1850  the  pro- 
portion was  but  $44,450,000  of  gold  to  139,000,000 
in  silver.  Then  gold  production  went  forward  by 
great  leaps  and  bounds.    How  much  was  produced  ? 

Well,  the  estimates  vary  greatly.  Soetbeer  places 
the  amount  at  81,407,000,000  by  the  close  of  1860  ; 
but  Tooke  and  Newmarche  have  put  it  about  $100,- 
000,000  less.  In  the  same  era  the  production  of 
silver  varied  but  a  trifle  from  $40,000,000  a  year. 


DEMONETIZATION  OF  GOLD.  39 

A  committee  of  the  United  States  Senate,  ap- 
pointed for  investigating  the  facts,  reported  that 
in  the  twelve  years  ending  with  1860  the  gold  pro- 
duced was  $1,339,400,000  ;  and  in  the  next  thir- 
teen years,  ending  with  1873,  it  was  $1,411,825,000. 
Thus,  in  the  thirteen  years  following  the  Califor- 
nia discovery  the  stock  of  gold  in  the  world  was 
doubled,  and  in  the  twenty-five  years  ending  with 
1873  it  was  more  than  tripled.  Several  economic 
writers  have  made  the  statement  very  much 
stronger  than  this,  and  M.  Chevalier,  in  his  famous 
argument  for  the  demonetization  of  gold,  written 
in  1857,  declares  that  the  production  of  gold  as 
compared  with  silver  had  increased  fivefold  in  six 
years  and  fifteenfold  in  forty  years,  and  that, 
owing  to  the  export  of  silver  to  Asia  and  its  use  in 
the  arts,  there  would,  in  a  very  little  while,  be  no 
possible  method  of  maintaining  the  parity  of  the 
two  metals  in  money  at  any  ratio  which  would  be 
honest  and  profitable. 

And  what  was  the  real  fact  ?  The  ratio,  which 
is  1849  was  15  ^'^^  of  silver  to  1  of  gold  in  the 
London  market,  and  the  same  in  1850,  never  sank 
below  i5^o%  to  1,  and  never  rose  above  the 
ratio  of  1849  till  after  silver  was  demonetized. 
Why  this   wonderful  steadiness  ?     The  answer  is 


40  IF   NOT   SILVER,    WHAT? 

easy.  In  the  eight  years  of  1853-60  France  im- 
ported gold  to  the  value  of  3,082,000,000  f.,  or 
$616,000,000,  and  exported  silver  to  the  value  of 
1293,000,000 ;  in  short,  her  bullion  operations 
amounted  to  $909,000,000.  She  stood  it  without 
a  quiver ;  she  grew  and  prospered  as  never  before. 
She  resolutely  refused  to  change  her  ratio.  Her 
mints  stood  open  to  all  the  gold  and  silver  of 
the  world,  and  thus  did  she  save  the  world  from  a 
great  calamity. 

Scarcely,  however,  had  the  golden  flood  begun 
when  the  moneyed  classes  and  those  with  fixed  in- 
comes raised  a  loud  cry.  From  the  laboring  pro- 
ducers no  complaint  was  heard.  They  never  com- 
plain of  increased  coinage.  In  the  United  States 
we  knew  nothing  of  this  clamor,  for  we  then  had 
no  large  creditor  class,  no  great  amount  of  bonds, 
and  very  few  people  interested  more  in  the  value 
of  money  than  in  the  rewards  of  labor.  In 
Europe,  however,  all  the  leading  writers  on 
finance  and  industries  took  part.  In  1852  M. 
Leon  Faucher  wrote  :  "  Every  one  was  frightened 
ten  years  ago  at  the  prospect  of  the  depreciation  of 
silver;  during  the  last  eighteen  months  it  is  the 
diminution  in  the  price  of  gold  that  has  been 
alarming  the  public."    In  England,  the  i^hiloso- 


DEMONETIZATION   OF   GOLD.  41 

pher  DeQuincey  wrote  that  California  and  Aus- 
tralia might  be  relied  upon  to  furnish  the  world 
1350,000^000  in  gold  per  year  for  many  years, 
thus  rendering  the  metal  practically  worthless  for 
monetary  purposes,  and  another  Englishman,  as 
if  resolved  to  go  one  better,  declared  that  gold 
would  soon  be  fit  only  for  the  dust  pan.  M. 
Chevalier  took  up  the  task  of  convincing  the  na- 
tions that  gold  should  be  demonetized  as  too 
cheap  for  a  currency,  and  of  course  the  interested 
classes  soon  organized  for  action. 

Holland  had  already  begun  the  process  in  1847, 
but  had  managed  it  so  awkwardly  that  her  condi- 
tion is  not  easily  understood  or  described  as  it  was 
in  1857.  The  estimated  amount  to  be  thrown  out 
of  use  was  only  half  the  real  amount,  and  in  the 
attempt  to  avoid  a  small  evil  they  produced  a 
very  great  one. 

Austria  was  at  that  time  involved  in  trouble 
with  her  paper  money  system,  and  thought  the 
cheapening  of  gold  offered  a  fair  opportunity  to 
come  to  a  metallic  basis.  The  reasoning  of  her 
statesmen  was  singularly  like  that  of  General 
Grant  in  1874,  when  he  pointed  to  the  great  silver 
discoveries  in  Nevada  as  a  providential  aid  to  the 
restoration  of  specie  payments,  being  at  the  time 


42  IF  NOT  SILVER,   WHAT? 

in  sublime  ignorance  that  he  had  long  before 
signed  an  act  demonetizing  silver,  and  thereby 
depriving  this  country  of  the  benefit  of  such  prov- 
idential aid.  But  the  strength  of  the  creditor 
classes  was  entirely  too  much  for  Austria  and 
Prussia,  and  the  German  States  allied  with  them 
almost  unanimously  declared  for  throwing  gold 
out  of  circulation.  A  convention  had  been  held 
at  Dresden  in  1838,  with  the  view  to  unifying  the 
coinage,  but  little  had  been  accomplished,  and 
now  a  convention  was  called  at  Vienna,  which  was 
attended  by  authorized  representatives  of  Prussia, 
Austria,  and  the  South  German  States.  It  was 
there  stated  that,  besides  various  minor  coins, 
there  were  three  great  competing  systems  in 
Germany,  namely,  those  of  Austria,  Prussia,  and 
Bavaria.  It  is  needless  to  go  into  details  of  this 
once  famous  convention,  but  suffice  it  to  say  that 
the  following  points  were  agreed  upon:  (1)  The 
Prussian  thaler  was  to  be  the  standard  for  Prussia 
and  the  South  German  States,  and  was  to  be  a 
silver  standard  exclusively.  (2)  The  Austrian 
silver  standard  was  to  prevail  throughout  that 
empire.  (3)  The  contracting  powers  could  coin 
trade  coins  in  gold,  but  none  others,  except 
Austria,    which    retained    the    right    of    coining 


DEMONETIZATION  OF   GOLD.  43 

ducats,  and  these  gold  coins  were  to  have  their 
value  fixed  entirely  by  the  relation  of  the  supply  to 
the  demand.  "  They  were  not  therefore  to  be  con- 
sidered as  mediums  of  payments  in  the  same  nature 
as  the  legal  silver  currency,  and  nobody  was  legally 
bound  to  receive  them  as  such ; "  in  short,  none 
of  the  gold  coins  permitted  by  the  convention 
were  to  be  legal  tender,  but  all  were  to  be  mere 
trade  coins  precisely  for  the  same  purpose  as  the 
trade  dollar  once  so  famous  in  the  United  States. 
The  result,  of  course,  was  to  make  silver  the 
standard  and  gold  the  fluctuating  money  or  token 
money.  The  effects  of  this  convention  remained 
with  but  little  change  till  1871. 

Of  course,  gold  at  once  became  "dishonest 
money.''  It  was  worth  less  than  silver,  and  a 
regular  gold  panic  set  in.  Holland  had  already 
demonetized  most  of  her  gold  coinage,  that  is, 
had  deprived  it  of  the  legal  tender  quality,  and 
Portugal  now  practically  prohibited  any  gold  from 
having  current  value,  except  English  sovereigns. 
Belgium  demonetized  all  its  gold  at  one  sweep, 
and  Eussia  prohibited  the  export  of  silver.  Thus, 
in  an  alarmingly  short  space  of  time  five  nations 
had  practically  demonetized  gold,  and  others  were 
threatening  to  do  so,  and  the  world  was  rapidly 


44  IF  NOT  SILVER,   WHAT? 

being  taught  that  gold  was  the  discredited  metal, 
while  silver  was  the  stable  and  sound  money. 

Some  curious  and  a  few  amusing  results  fol- 
lowed. Among  a  certain  class  in  England  a  regu- 
lar panic  broke  out,  and  in  Holland  and  Belgium 
even  the  masses  of  the  people  became  suspicious 
of  gold  and  disliked  to  take  it  in  payment.  In 
the  latter  country  a  few  traders  hung  out  signs  to 
attract  customers,  to  this  effect,  ''L'or  est  recu 
sans  perte,"  meaning  that  gold  money  would  be 
taken  there  without  a  discount.  It  is  probably 
not  known  to  one  American  in  a  thousand  that 
the  practice  of  inserting  a  silver  clause  in  con- 
tracts became  at  that  time  so  common  in  Europe 
that  it  was  actually  transferred  to  the  United 
States,  and  in  England  life  insurance  companies 
were  established  on  a  silver  basis.  Several  Ameri- 
can corporations  stipulated  for  payment  in  silver, 
especially  of  rents,  and  to  this  day  a  New  England 
establishment  is  receiving  a  certain  number  of 
ounces  of  fine  silver  yearly  under  leases  then 
drawn  up. 

It  is  equally  interesting  to  note  in  the  literature 
of  that  period  arguments  against  gold  almost 
word  for  word  like  those  now  used  against  silver. 
The  financial  managers  threw  gold  out  of  use  and 


DEMONETIZATION  OF   GOLD.  45 

then  urged  its  non-use  as  a  reason  for  its  demone- 
tization. "  None  in  circulation,"  "  variation  shows 
impossibility  of  bimetallism" — such  were  the 
phrases  then  applied  to  gold,  as  we  now  find  them 
applied  to  silver.  An  artificial  disturbance  was 
created,  and  then  pleaded  as  a  reason  for  further 
disturbance. 

All  this  while  the  financiers  of  England  were 
bombarded  with  arguments  and  prophecies  of  evil, 
but  her  geologists  pointed  out  clearly  that  Aus- 
tralian and  Californian  products  were  almost 
entirely  from  the  washing  of  alluvial  sands  and 
consequently  must  be  very  temporary.  Her 
statesmen  believed  the  geologists  rather  than  the 
panic-stricken  financiers,  and  so  she  held  for  gold 
monometallism. 

But  it  is  to  France  that  the  world  is  indebted 
for  maintaining  the  parity  through  those  years 
of  alarm  and  panic.  M.  Chevalier  urged  upon 
French  statesmen  the  importance  of  returning  to 
the  system  which  had  been  in  force  previous  to 
1785,  when  silver  was  the  standard  and  gold  was 
rated  to  it  by  a  law  or  proclamation.  The  propo- 
sition was  actually  brought  forward  in  Council 
and  urged  upon  the  Emperor  that  silver  should  be 
made  the  standard  and  gold  re-rated  in  proportion 


46  IF  NOT   SILVER,   WHAT? 

to  it  every  six  months.  The  net  result  was,  by 
France  taking  in  gold  and  letting  out  silver,  that 
in  1865  that  country  had  a  larger  stock  of  gold 
than  any  other  in  Europe.  SuflSce  it  to  repeat 
that  several  nations,  including  seventy  million 
people,  actually  demonetized  gold,  deprived  it  of 
its  legal  tender,  and  treated  it  as  a  ratable  com- 
modity; while  France,  single-handed  and  alone 
upon  the  continent  of  Europe,  was  able  to  absorb 
the  enormous  surplus  of  gold  and  maintain  the 
parity  by  the  simple  process  of  keeping  her  mints 
open  to  both  at  the  ancient  ratio. 

Thus  ended  the  scheme  to  drive  gold  out  of 
circulation  and  base  the  business  of  the  world 
upon  one  metal,  and  that  the  dearer  metal,  silver. 
But  suppose  the  scheme  had  succeeded ;  suppose 
France  had  been  less  firm  ;  what  a  wonderful 
flood  of  wisdom  on  the  virtues  of  silver  we  should 
have  had  from  the  monometallists  !  How  arro- 
gantly they  would  have  denounced  us — who  should, 
I  trust,  in  that  case  have  been  laboring  to  restore 
gold  to  free  coinage — how  arrogantly  they  would 
have  denounced  us  as  the  advocates  of  cheap 
money,  dishonest  tricksters,  repudiators  !  How 
they  would  have  rung  the  changes  on  "  dishonest 
money,"  "  fifty-cent  gold  dollars  !  "     What  long. 


DEMONETIZATION   OF   GOLD.  47 

long  columns  of  figures  should  we  have  liad  to 
prove  the  stability  of  silver,  the  fluctuating  nature 
of  gold  !  What  denunciations,  what  sneers,  what 
gibes,  what  slurs  would  have  filled  the  New  York 
city  papers  in  regard  to  those  Western  fellows  who 
want  to  degrade  the  standard  !  How  glib  would 
have  been  the  tongues  of  their  orators  in  denounc- 
ing all  who  advocated  the  remonetization  of  gold 
as  cranks,  socialists,  pojDulists,  anarchists,  ne'er- 
do-wells,  and  Adullamites,  kickers,  visionaries, 
and  frauds  !  Is  there  any  practical  doubt  that  we 
should  have  witnessed  all  this  ?  None  whatever  ; 
in  fact,  something  of  the  same  sort  was  heard  in 
Europe  at  the  time  of  the  demonetization  of  gold. 
It  all  goes  to  show  that  self-interest  blinds  the 
intellects  of  the  best  of  men  so  that  they  readily 
believe  that  which  is  to  their  interest  is  honest, 
but  that  the  farmer  who  seeks  to  raise  the  price  of 
what  he  has  to  sell  thereby  throws  himself  down 
as  dishonest.  Of  course,  the  successful  demone- 
tization of  gold  would  have  brought  about  an 
enormous  appreciation  of  the  value  of  silver,  since 
it  would  have  thrown  the  whole  burden  of  main- 
taining the  business  of  the  world  upon  one  metal, 
and  equally,  of  course,  we  should  have  had  the 
same  attacks  upon  the  owners  of  gold  mines  that 


48  IF  NOT  SILVEE,   WHAT? 


we  now  have  upon  the  owners  of  silver  mines.  As 
the  withdrawal  of  silver  from  its  place  as  primary 
money  and  its  reduction  to  the  level  of  token 
money  has  thrown  the  burden  of  sustaining  prices 
upon  gold,  so  unquestionably  would  the  reverse 
process  have  occurred  had  gold  been  reduced  to 
token  money  in  place  of  silver.  All  this  we  know 
would  have  taken  place  from  what  actually  did 
take  place,  and  this  makes  important  the  history 
of  the  demonetization  of  gold. 


RELATIVE   PEODUCTION  OF  GOLD  AND 

SILVER. 

Among  the  many  plausible  pleas  of  the  morio- 
metallists,  the  most  plausible,  perhaps,  is  the  plea 
that  the  great  divergence  between  the  metals  since 
1873  has  been  due  entirely  to  the  increased  pro- 
duction of  silver.  A  very  brief  examination,  I 
think,  will  show  its  falsity,  and  that  it  is  equally 
false  in  fact  and  fallacious  in  logic  ;  for,  first, 
there  has  been  no  great  *'  depreciation''  in  silver, 
that  metal  having  almost  the  same  power  to  com- 
mand commodities,  excepting  gold,  that  it  had  in 
1873  ;  and,  second,  the  claim  that  the  increased 
production  of  ten  or  twenty  years  would  alone 
greatly  cheapen  silver  is  flatly  contradicted  by  all 
previous  experience.  Of  many  statements  of  the 
fallacy,  I  take  a  recent  one  from  the  New  York 
Times  as  the  most  terse  and  catchy  for  popular 
reading,  and  likewise  most  ludicrously  absurd  : 

"Why  Silver  is  Cheap. 
*'In  1873  the  total  product  of  silver  in   the 


60  IF  NOT  SILVER,   WHAT? 

world  was  61,100,000  ounces,  and  the  silver  in  a 
dollar  was  worth  $1.04  in  gold. 

''Last  year  the  world's  product  of  silver  was 
165,000,000  ounces,  and  the  silver  in  a  dollar  was 
worth  only  50.7  cents. 

*'  In  1894  the  potato  crop  of  the  United  States 
was,  in  round  numbers,  170,000,000  bushels,  and 
the  average  price  53c. 

''In  1895  the  estimated  potato  crop  was  400,- 
000,000  bushels,  and  the  average  price  was  26c. 

"  The  fall  in  both  cases  was  due  to  the  same 
cause." 

Observe  the  assumptions  :  1.  That  the  output 
of  one  year  determined  the  value  of  silver  as  the 
crop  of  potatoes  does  their  price  for  that  year  ! 
The  schoolboy  who  does  not  know  better  deserves 
the  rattan.  If  the  theory  were  correct,  gold  in 
1856  should  have  been  worth  but  a  fourth  what  it 
was  in  1848,  whereas  the  largest  estimate  of  its 
decline  in  value  puts  it  at  25  per  cent. 

2.  That  the  increased  silver  production  of 
twenty-two  years  would  reduce  its  value  in  the 
exact  mathematical  proportions  of  the  increase. 
This  theory  ignores  the  two  most  important  facts 
determining  the  value  of  money  :  that  the  silver 
or  gold  mined  in  any  one  year  is  added  to  the 


RELATIVE   PRODUCTION,  61 

existing  stock,  to  which  it  is  but  a  minute  in- 
crease ;  and  that  wealth,  population,  and  produc- 
tion are  also  increasing  rapidly,  relative  to  which 
the  increase  of  silver  is  but  a  trifle  indeed.  The 
yield  of  the  Monte  Eeal  a  thousand  years  ago  may 
have  cost  iive  times  as  much  labor  per  ounce,  and 
that  of  Laurium  ten  or  even  twenty  times  as 
much  ;  but  all  of  both  which  is  not  lost  goes  with 
the  last  ounce  mined  into  the  general  stock,  which 
is  now  about  $4,000,000,000  in  coin  alone.  The 
greatest  annual  production  has  in  but  a  very  few 
cases  added  so  much  as  3  per  cent,  to  the  stock  on 
hand,  and  about  half  of  it  is  consumed  in  the 
arts.  If  the  increase  of  the  annual  production  of 
silver  by  2f  to  1  in  twenty-two  years  reduced  its 
value  one-half,  will  the  Times  tell  us  what 
should  have  been  the  reduction  in  the  value  of 
gold  when  this  product  increased  by  fivefold  in 
eight  years  ?  It  should  further  be  noted  that  the 
discovery  of  a  ^'  Big  Bonanza  "  is  an  event  so  rare 
that  it  has  not  happened,  on  an  average,  more 
than  once  in  three  centuries  since  the  dawn  of 
history,  and  that  since  1873  the  growth  in  the 
world^s  production  and  trade  has  been,  relative 
to  former  times,  even  greater  than  the  increase 
in  the  production  of  silver. 


52  IF  NOT  SILVEB,    WHAT? 

Consider  the  following  facts,  which  I  have  con- 
densed from  Mulhall :  In  1800  the  total  yearly 
international  commerce  of  the  world  was  esti- 
mated at  11,510,000,000.  Forty  years  later  it 
had  only  increased  90  per  cent.,  amounting  in 
1840  to  $2,865,000,000,  and  in  that  year  there 
were  in  all  the  world  but  4,315  miles  of  railroad 
and  no  electric  telegraph.  The  total  horse-power 
of  all  the  steamships  of  the  world  was  but  330,000, 
and  the  carrying  power  of  all  the  shipping  but 
10,482,000  tons.  To-day  the  international  com- 
merce of  the  world  is  almost  $20,000,000,000,  and 
increasing  at  the  rate  of  $1,000,000,000  per  year  ; 
there  are  in  the  world  over  400,000  miles  of  rail- 
way and  a  very  much  greater  mileage  of  magnetic 
telegraph,  including  14  intercontinental  cables  ; 
the  ocean  tonnage  of  Great  Britain  alone  is  very 
much  greater  than  was  that  of  the  whole  world  in 
1840  ;  and  tremendous  as  this  increase  of  inter- 
national trade  has  been,  it  is  the  merest  trifle  com- 
pared with  the  increase  of  the  internal  trade  in 
several  of  the  greater  nations. 

What  then  has  caused  the  "  great  deprecia- 
tion "  ?  Nothing  has  caused  it.  There  has  been 
but  a  trifling  depreciation  indeed.  It  is  as  clearly 
proved  as  anything  unseen  can   be   that   if   the 


RELATIVE   PRODUCTION.  58 

nations  had  left  silver  and  gold  as  they  were  in 
1870,  both  would  have  gained  materially  in  value, 
that  is,  in  the  power  to  command  commodities, 
because  of  the  vastly  greater  relative  increase  of 
the  latter  ;  but  by  demonetization  all  the  increase 
has  been  concentrated  in  gold,  leaving  silver  al- 
most exactly  as  it  was.  At  present,  however,  I 
devote  myself  to  the  question  whether  there  has 
been  such  an  increase  in  the  production  as  would 
normally  cheapen  it.  On  this  point  we  have  evi- 
dence to  convince  any  unbiased  mind,  for  the 
relative  production  of  silver  and  gold  has  in  for- 
mer ages  varied  very  much  more  than  in  the  last 
twenty-three  years,  and  the  variation  has  ex- 
tended over  much  longer  periods,  without  causing 
more  than  the  most  trifling  divergences  in  value. 
And  the  explanation  is  simple  :  the  two  metals 
received  equal  recognition  at  the  mint  and  in 
legal  tender  laws  ;  the  greatly  increased  use  of  the 
cheaper  maintained  its  value  in  coinage,  while  dis- 
use of  the  dearer  tended  equally  to  check  its  ap- 
preciation. In  this  sense  government  can  "  create 
value  "  by  creating  a  use. 

From  1660  to  1700,  for  instance,  the  production 
of  silver  averaged  in  value  much  more  than  twice 
that  of  gold,  and  in  quantity  some  thirty-three 


54  IF  NOT  SILVER,   WHAT? 

times  as  much  ;  yet  all  those  years,  the  highest 
mint  ratio  was  15.20  to  1  and  the  lowest  14.81 — 
a  variation  in  money  value  of  but  .39  or  2.6  per 
cent.  From  1701  to  1760  inclusive,  the  propor- 
tion of  gold  produced  gradually  rose  from  a  little 
over  a  third  to  40  per  cent,  in  values,  yet  the 
money  ratio  remained  remarkably  constant,  the 
highest  being  15.52  of  silver  to  1  of  gold  and  the 
lowest  14.14.  In  other  words,  for  sixty  years 
there  were  produced  on  an  average  about  28 
ounces  of  silver  to  1  of  gold,  yet  the  widest 
variation  of  their  money  values  in  all  those  years 
was  less  than  9  per  cent.  In  the  face  of  such 
facts  as  these,  we  are  asked  to  believe  that  while 
an  average  of  over  30  ounces  to  1  created  an  aver- 
age variation  of  less  than  6  per  cent.,  and  a  great- 
est variation  of  less  than  9  per  cent.,  a  production 
of  some  20  ounces  to  1  since  1882  has  created  a 
variation  of  100  per  cent.  And  that  the  variation 
began  nine  years  before  the  value  production  of 
silver  exceeded  that  of  gold  !  It  is  an  affront  to 
our  common  sense. 

I  should  say,  at  this  point,  that  my  figures  are 
taken  from  the  latest,  and  in  my  opinion  the 
most  scholarly  work  in  favor  of  monometallism, 
"The    History   of   Currency,"   by  Prof.    W.  A. 


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RELATIVE   PRODUCTION.  55 

Shaw,  Fellow  of  the  Kojal  Historical  and  Royal 
Statistical  Societies.  As  the  ratio  between  silver 
and  gold  varied  considerably  in  the  different  marts 
of  Europe,  I  follow  his  plan  (which  is  Soetbeer's) 
of  taking  it  as  it  stood  at  any  particular  time  in 
the  city  which  might  then  be  called  the  greatest 
commercial  centre,  whether  Venice,  Hamburg, 
Antwerp,  or  London.  His  history  comprises  the 
entire  period  from  1252  to  1894.  It  is  only  fair 
that  I  should  also  give  his  explanation  of  the 
stability  of  the  metals,  which  is  extremely  inter- 
esting. 

He  begins  his  second  chapter  with  the  state- 
ment that  the  discovery  of  America  was  ''the 
monetary  salvation  and  resurrection  of  the  Old 
World  "  ;  that  it  was  a  time  of  unexampled  in- 
crease in  the  precious  metals  and  equally  unexam- 
pled rise  of  prices,  but  there  was  also  "feverish 
instability  and  want  of  equilibrium  in  the  mone- 
tary systems  of  Europe.'"  He  shows  hew  the  first 
great  import  was  of  gold,  which  began  to  aft'ect 
prices  in  1520  ;  how  this  was  followed  by  a  very 
much  greater  increase  in  silver,  and  how,  while 
prices  were  rising  so  rapidly  as  to  stimulate  trade 
and  incidentally  do  damage  by  causing  great  fluc- 
tuations, yet  there  must  have  been  some  great 


56  IF  NOT  SILVER,   WHAT? 

regulator  preventing  the  evil  ■which  we  should 
a  priori  have  expected.  He  finds  it  in  the  fact 
that  Antwerp  had  taken  the  place  of  Venice  and 
Florence,  and  conducted  a  great  trade  with  the 
far  East.  His  language  is  :  "  The  centre  of  Euro- 
pean exchanges — Antwerp  in  the  sixteenth  cen- 
tury as  London  to-day — has  always  performed  one 
supreniest  function,  that  of  regulating  the  flow  of 
metals  from  the  New  World  by  means  of  export- 
ing the  overplus  to, the  East.  The  drain  of  silver 
to  the  East,  discernible  from  the  very  birth  of 
European  commerce,  has  been  the  salvation  of 
Europe,  and  in  providing  for  it  Antwerp  acted  as 
the  safety-valve  of  the  sixteenth  century  system  as 
London  has  done  since.  The  importance  of  the 
change  of  the  centre  of  gravity  and  exchange  from 
Venice  to  Antwerp,  therefore,  lies  in  this  fact. 
Under  the  old  system  of  overland  and  limited 
trade,  Venice  could  only  provide  for  such  puny 
exchange  and  flow  as  the  mediaeval  system  of 
Europe  demanded  ;  she  would  have  been  unable 
to  cope  with  such  a  flood  of  inflowing  metal  as  the 
sixteenth  century  witnessed,  and  Europe  would 
have  been  overwhelmed." 

Professor  Shaw  argues  that  without  the  Eastern 
safety-valve  Europe  would  have  been  ruined  by  an 


RELATIVE   PRODUCTION.  57 

excess  of  the  precious  metals,  that  India  furnished 
the  needed  reservoir — did  she  not  take  gold  as 
well  as  silver  ? — and  that  Venice  was  so  far  limited 
to  an  overland  trade  that  she  could  not  have  per- 
formed the  function  Antwerp  did.  Later  he  sets 
forth  the  current  monometallist  position  that  the 
nations  are  now  as  one  in  trade  and  the  inter- 
change of  the  precious  metals,  and  therefore  even 
the  partial  equilibrium  of  the  sixteenth  and  sev- 
enteenth centuries  could  not  be  maintained.  Let 
us,  then,  bring  the  figures  down  to  the  present, 
and  it  will  be  found,  I  think,  that  the  farther 
down  we  come  the  weaker  does  the  monometallist 
contention  appear. 

The  improved,  more  extended,  and  more  inti- 
mate intercourse  of  the  nations  brought  about  by 
the  introduction  of  steam,  electricity,  and  other 
agencies  tends  to  minimize  the  fluctuations  of  the 
two  metals,  and  indicates  that  the  divergences  of 
the  metals  in  mediaeval  times  was  due  rather  to 
the  want  of  speedy,  easy,  and  certain  intercourse 
and  communication  of  the  nations  than  to  an 
innate  commercial  tendency  of  the  two  metals  to 
diverge.  Had  the  same  intimate  and  speedy  com- 
mercial relation  existed  between  the  nations  of  the 
world  in  those  times  as  now  exists,  the  equalizing 


58  IF  NOT  SILVER,   WHAT? 

tendencies  of  trade  would  evidently  have  pre- 
vented not  only  the  ratio  of  divergence  to  which 
the  metals  attained  at  different  periods,  but  would 
have  prevented  a  difference  of  ratio  existing  between 
the  different  nations  at  the  same  period  of  time. 

From  1761  to  1800,  inclusive,  the  relative  pro- 
duction of  gold  decreased  steadily,  until  it  was 
but  23.4  per  cent,  of  the  total  value,  to  76.6  per 
cent,  of  silver.  In  other  words,  there  were  for 
many  of  the  later  years  over  50  ounces  of  silver 
produced  to  1  of  gold,  and  yet  the  ratio  stood 
Jong  at  15.68  to  1.  This  is  almost  exactly  the 
ratio  fixed  by  Hamilton  and  Jefferson,  fixed  be- 
cause of  its  long-continued  maintenance  in  Euro- 
pean markets.  During  these  forty  years  the  pro- 
duction of  silver  in  proportion  to  gold  was  never 
for  even  one  year  as  low  as  the  highest  proportion 
of  any  year  since  1873,  and  yet  the  money  value 
only  varied  from  14.42  to  15.72,  or  a  fraction  over 
8  per  cent.  In  the  face  of  such  figures  as  these,  the 
change  in  relative  production  since  1873  seems  too 
trifling  to  be  taken  into  account,  especially  since 
in  that  year  and  some  time  after  the  value  pro- 
duction of  gold  at  16  to  1  was  much  the  greater, 
nor  was  it  till  1883  that  the  world's  silver  product 
exceeded  that  of  gold. 


RELATIVE  PRODUCTION.  59 

In  1800-10  the  annual  production  of  gold  was 
$12,069,000  and  of  silver  almost  exactly  $39,000,- 
000,  or  some  50  ounces  to  1  ;  yet  the  highest  ratio 
was  16.08,  and  the  lowest  15.26.  This  relative 
production  changed  very  slowly,  and  in  1831-40 
of  the  total  in  values  produced  34.5  per  cent, 
was  gold  and  65.5  per  cent,  silver. 

That  is,  there  were,  for  ten  years,  about  thirty 
times  as  many  ounces  of  silver  mined  as  of  gold, 
and  during  these  years  the  change  in  the  ratio  was 
so  minute  that  it  can  only  be  calculated  in  small 
fractions  of  1  per  cent.  In  1841-50,  for  the  first 
time  since  the  middle  of  the  sixteenth  century,  we 
find  the  production  of  gold  the  greater,  that  metal 
being  52.1  j)er  cent,  of  the  total  product,  and  sil- 
ver but  47.9  per  cent.  During  the  decade  the 
lowest  value  ratio  of  silver  to  gold  was  15.70,  and 
the  highest  15.93,  a  variation  of  only  1.4  percent. 
Then  California  and  Australia  poured  out  their 
wonderful  golden  flood,  and  all  the  world  was 
changed.  In  1851-55  the  gold  yield  was  77.6  per 
cent,  of  the  total,  and  the  silver  yield  22.4,  and 
for  the  next  five  years  the  change  was  but  .2  of 
1  per  cent.  In  other  words,  during  those  ten 
years  the  average  annual  yield  of  silver  was  less 
than  5  ounces  to  1  of  gold ;  so  if  the   "^  over- 


60  IF  NOT  SILVER,   WHAT? 

production  theory  "  laid  down  by  the  Times  were 
correct,  gold  should  have  lost — well,  at  least  70 
per  cent,  of  its  value  in  silver.  The  actual  vari- 
ation was  from  a  ratio  of  15.98  to  one  of  15.46, 
or  a  relative  depreciation  of  gold  of  considerably 
less  than  3  per  cent.  Now,  it  is  alleged  by  many 
who  have  made  a  study  of  prices  during  that 
period,  that  in  actual  value  gold  depreciated  25 
per  cent. ;  so  it  is  plain  that  it  carried  down  silver 
with  it,  and  the  only  logical  explanation  is  that 
the  mints  were  equally  open  to  both. 

We  have  seen  that  in  all  the  century  and  a  half 
when  the  mines  were  pouring  forth  silver  at  the 
rate  of  from  20  ounces  to  1  of  gold  up  to  55 
ounces  to  1,  the  greatest  variation  in  their  value 
was  less  than  9  per  cent.,  and  in  the  twenty  years 
when  the  silver  production  was  to  that  of  gold  as 
less  than  5  ounces  to  1,  the  value  of  gold  produced 
being  more  tlian  three  times  that  of  silver,  their 
money  value  varied  less  than  3  per  cent.,  and  yet 
we  are  coolly  asked  to  believe  that  since  1873  sil- 
ver is  to  be  rated  among  variable  commodities  like 
potatoes,  the  size  of  the  crop  each  year  determin- 
ing the  value.  Monometallists  have  had  much  to 
say  about  the  relative  cheapness  of  gold  during 
those  years,  and  have  laid  much  stress  upon  the 


RELATIVE  PRODUCTION.  ^1 

fact  that  it  was  an  era  of  great  prosperity  and 
rapid  development,  with  rise  of  wages  and  the 
prices  of  farm  jjroduce.  In  this  argument  they 
admit  three  things  :  that  we  have  a  moral  and 
constitution al  right  to  use  the  cheaper  metal  at 
any  time  ;  that  we  did  use  gold  for  all  those  years 
simply  because  it  was  easier  to  pay  debts  with  it, 
that  is,  it  was  cheaper,  and  that  the  use  of  the 
cheaper  metal  aided  greatly  in  making  prosperity. 
That  is  all  that  any  bimetallist  claims.  As  the 
entire  burden  was  not  then  thrown  upon  silver, 
we  claim  that  it  should  not  now  be  thrown  upon 
gold,  doubling  or  trebling  the  rate  of  its  advanc- 
ing value  ;  and  as  the  privilege  to  use  the  cheaper 
metal  then  checked  the  advance  of  the  dearer  and 
enhanced  prosperity,  we  insist  that  the  system  of 
that  time  shall  be  restored. 

The  subsequent  figures  are  equally  convincing. 
In  1861-65  the  gold  products  were  72.1  per  cent, 
of  the  total,  the  silver  27.9  per  cent.,  the  variation 
in  ratio  from  15.26  to  15.44.  In  1866-70  the  pro- 
duction stood  69.4  to  30.6,  the  variation  in  ratio 
15.43  to  15.60.  In  1871-75  production  was  still 
68.5  to  41.5,  but  the  variation  in  coin  value  was 
from  15.57  to  16.62.  That  something  had  hap- 
pened quite  aside  in  its  effects  from  relative  pro- 


62  IF  NOT   SILVER,   WHAT? 

duction  was  evident,  but  the  people  did  not  find 
out  what  it  was  till  late  in  1875.  At  the  time  the 
demonetization  act  was  passed,  the  ratio  was  still 
15.55  to  1,  and  one  of  the  reasons  given  for  the 
act  of  February  12, 1873,  was  that  the  silver  dollar 
was  worth  $1.03  in  gold;  yet  before  the  close  of 
that  year,  and  before  it  was  known  that  there  was 
to  be  any  great  increase  in  the  product  of  silver, 
its  relative  value  ran  down  till  it  was  below  that 
of  gold.  Can  any  one  doubt  the  cause  ?  Surely 
not  if  he  observes  the  additional  fact  that  the 
relative  decline  of  silver  continued  despite  the 
greater  value  production  of  gold,  and  that  1882, 
ten  years  after  demonetization,  was  actually  the 
first  year  since  1849  in  which  the  world's  produc- 
tion of  silver  exceeded  that  of  gold.  What  one 
hundred  and  ninety  years  of  continuous  and  often 
enormous  relative  overproduction  of  silver  had  not 
done,  ten  years  of  demonetization  had  accom- 
plished, and  that  while  the  relative  supply  of  gold 
was  still  the  greater.  Is  it  possible  to  miss  the 
real  cause  ?  Is  there  in  Euclid  a  demonstration 
more  conclusive  ? 

Monometallists  have  exhausted  the  resources  of 
verbal  gymnastics  to  make  these  figures  fit  their 
theories.     Determined  not  to  admit  that  demone- 


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RELATIVE  PRODUCTION.  63 

tization  was  the  cause,  they  have  given  so  many 
explanations  that,  expressed  in  the  briefest  words, 
they  would  cover  many  pages  like  this.  The  first 
was  that  the  opening  of  the  ''  Big  Bonanza  "  on 
the  Comstock  lode  had  given  notice  that  silver 
was  coming  in  a  flood;  but  that  was  only  for  popu- 
lar use  in  this  country.  Scientific  men  knew  that 
to  be  a  rare  find  indeed,  not  likely  to  occur  again 
for  centuries.  The  next  explanation  was  that 
China  and  India,  so  long  the  reservoir  into  which 
the  surplus  flowed,  had  ceased  to  absorb  it;  and 
the  next,  demonetization  of  silver  by  Germany 
and  her  throwing  her  old  silver  on  the  market. 
And  with  this  the  people  began  to  get  at  the  true 
reason — the  general  demonetization  by  so  many 
nations. 

The  following  table  gives  the  annual  production 
of  gold  and  silver  from  the  discovery  of  America 
to  and  including  the  year  1892  ;  and  the  highest 
and  lowest  ratio  of  silver  to  gold  from  1681  to  and 
including  the  year  in  which  silver  ceased  to  be  in 
this  country  primary  money  : 


64 


IP  NOT  SILVER,   WHAT? 


YEARS.                                           GOLD.  SILTKB.                   BATIO. 

1493-1530 $3,855,000  $1,953,000 

1521-1544 4,759,000  3,749,000 

1545-1560 5,657,000  13,950,000 

1561-1580 4,546,000  13,447,000 

1581-1600 4,905,000  17,409,000 

1 601-1 630 5, 663, 000  1 7, 538, 000 

1631-1640 5,516,000  16,358,000 

1641-1660 5,839,000  15,323,000 

1661-1680.. 6,154,000  14,006,000 

1681-1700 7,154,000  14,309,000      14.81-15.30 

1701-1720 8,530,000  14,779,000      15.04-15.52 

1721-1740 12,681,000  17,921,000      14.81-15.41 

1741-1760 16,356,000  23,158,000     14.14-15.36 

1761-1780 13,761,000  37,138,000      14.52-15.27 

1781-1800 11,823,000  36,534,000      14.42-15.74 

1801-1810 11,815,000  37,161,000      15.26-16.08 

1811-1820 7,606,000  23,474,000      15.04-16.35 

1821-1830 9,448,000  19,141,000      15.70-15.95 

1831-1840 13,484,000  24,788,000      15.62-15.93 

1841-1850 36,393,000  32,434,000      15.70-15.93 

1851-1855 131,268,000  36,837,000      15.33-15.59 

1856-1860 136,946,000  37,611,000      15.19-15.38 

1861-1865 131,728,000  45,764,000      15.26-15.44 

1866-1870 127,537,000  55,652,000      15.43-15.60 

1871-1872 113,431,000  81.849,000     15.57-15.65 

1873 96,200,000  81,800,000 

1874 90,750,000  71,500,000 

1875 97,500,000  80,500,000 

1876 103,700,000  87,600,000 


RELATIVE   PRODUCTION.  65 

TEABS.  GOLD.  SILVER. 

1877 114,000,000  81,000,000 

1878 119,000,000  95,000,000 

1879 109,000,000  96,000,000 

1880 106,500,000  96,700,000 

1881 103,000,000  102,000,000 

1883 102,000,000  111,800,000 

1883 95,400,000  115,300,000 

1884 101,700,000  105,500,000 

1885 108,400,000  118,500,000 

1886 106,000,000  120,600,000 

1887 105,000,000  124,366,000 

1888 109,900,000  142,107,000 

1889 118,800,000  162,690,000 

1890 118,848,700  172,234,500 

1891 126,183,500  186,446,880 

1892 138,861,000  196,458,800 

Thus  we  see  that,  for  twenty-seven  years  after 
the  discovery  of  America,  the  gold  production  was 
double  that  of  silver  ;  for  the  next  eighty  years  the 
production  of  silver  was  considerably  more  than 
double  that  of  gold  ;  for  the  next  one  hundred 
years  the  production  of  silver  was  more  than  2| 
times  that  of  gold,  and  for  the  next  century  and  a 
half,  to  wit,  from  1701  to  1850,  inclusive,  despite 
the  fact  of  the  tremendous  gain  of  gold  in  the  last 
few  years,  the  production  of  silver  fell  but  little 
short  of  twice  that  of  gold.  And  yet,  the  varia- 
5 


QQ  IF  NOT  SILVER,   WHAT? 


tions  in  coin  value  were  of  the  trifling  character 
previously  stated.  When  taken  by  shorter  periods, 
the  argument  is  still  more  startling.  Thus  in 
1801-20  the  production  was  almost  exactly  4  of 
silver  to  1  of  gold  ;  for  the  next  twenty  years  a 
minute  fraction  less  than  2  of  silver  to  1  of  gold  ; 
for  the  next  twenty  2|  of  gold  for  1  of  silver  ;  and 
for  the  next  twenty  nearly  2  of  gold  for  1  of  silver, 
while  during  these  awful  years  since  1873,  in  which 
there  has  been  so  much  said  about  the  "flood  of 
silver/^  its  production  has  never  once  been  twice 
that  of  gold,  and  for  the  entire  period  has  exceeded 
it  by  the  merest  trifle.  Is  it  any  wonder  that  Dr. 
Eduard  Suess,  the  great  German  authority  on  the 
metals,  and  Professor  of  Geology  at  the  University 
of  Vienna,  concluded  his  recent  work  with  these 
strong  statements  : 

"  Present  legislative  institutions  are  at  variance 
with  the  conditions  established  by  nature.  Even 
now  agriculture  and  in  part  industry  in  Europe  are 
sorely  at  a  disad  vantage  against  silver  countries  such 
as  India  and  Mexico.  The  advantage  of  this  situa- 
tion accrues  in  England  to  the  holders  of  interest- 
bearing  notes,  the  productive  value  of  which  in- 
creases with  the  growing  scarcity  of  gold.  .  .  . 
As  soon  as  the  figure  23.75  shall  have  been  reached. 


EELATIVE   PRODUCTION.  67 

all  gold  obligations  will  liaye  increased  in  value 
one-half  ;  but  nothing  prevents  that  figure  from 
rising  to  31.  [It  has  since  risen  even  above  that.] 
.  .  .  You  say  a  regulation  cannot  be  interna- 
tional, but  you  overlook  bow  long  the  ratio  of  1  to 
15|  was  upheld  and  worked  beneficently.  We  wish, 
say  the  London  bankers,  to  receive  our  interest  in 
gold  and  not  in  depreciated  silver  ;  but  silver  would 
not  be  depreciated  the  moment  an  agreement  went 
into  effect.  Why,  you  ask,  shall  we  cast  such  profit 
into  the  hands  of  the  owners  of  silver  mines  ? 
Remember  that  you  are  now  casting  the  same  profit 
into  the  hands  of  the  owners  of  gold  mines  and 
washings.  No  man  would  lose  by  rehabilitation, 
and  the  whole  world  would  be  richer.  .  .  . 
Europe  is  laboring  under  a  grave  delusion.  The 
economy  of  the  world  cannot  be  arbitrarily  carried 
on  in  the  hope  that  somewhere  a  new  California, 
and  at  the  same  time  a  new  Australia,  will  be  found 
whose  alluvial  lands  will  give  relief  for  a  decade. 
.  .  .  The  question  is  no  longer  whether  silver 
will  again  become  a  full  value  coinage  metal  over 
the  whole  earth,  but  what  are  to  be  the  trials 
through  which  Europe  is  to  reach  that  point." 

At  this  point  it  seems  to  me  well  to  present  the 
figures  of  relative  production  for  the  last  century 


68  IF  NOT  SILVER,   WHAT? 

in  a  more  compact  shape,  with  a  view  to  bringing 
out  the  contrast : 

Silver  produced  1792-1850 $1,690,217,000 

Gold  produced 848,186,000 

Excess  of  silver  production 842,031,000 

Gold  produced  1850-73 $2,724,825,000 

Silver  produced 1,150,025,000 

Excess  of  gold 1,574,800,000 

Gold  produced  1873-92,  inclusive... $2,060,897,000 

Silver  produced 2,264,419,000 

Excess  of  silver 203,522,000 

Gold  produced  1850-92,  inclusive... $4, 785, 722, 000 

Silver  produced 3,414,444,000 

Excess  of  gold 1,371,278,000 

Gold  produced  1792-1892,  inclusive  $5,633,908,000 

Silver  produced 5,104,961,000 

Excess  of  gold 528,947,000 

Thus  are  we  confronted  with  the  truly  startling 
paradox  that  during  all  the  century  and  a  half 
when  the  production  of  silver  was  nearly  twice 
that  of  gold,  and  the  two  centuries  back  of  that 
when  it  was  more  than  twice,  the  yariation  in  coin- 
age value  never  rose  to  9  per  cent.,  and  for  many 
years  at  a  time  corresponded  with  the  ratio  set  by 
the  mint ;  but  at   the  end  of  a  century  during 


RELATIVE   PRODUCTION.  69 

which  the  gold  production  was  half  a  billion  greater 
than  that  of  silver,  and  at  the  end  of  half  a  cen- 
tury when  it  was  nearly  a  billion  and  a  half  greater, 
the  really  scarcer  metal  has  declined  in  terms  of 
the  other  nearly  one-half  !  And  all  this,  the  mo- 
nometallist  tells  us,  because  there  has  been  an  ex- 
cess of  silver  produced  amounting  to  less  than  a 
quarter  of  a  billion  in  twenty-three  years.  Belief 
in  such  a  proposition  would  indeed  be  a  triumph 
of  faith  over  figures.  And  to  add  to  the  trial  of 
our  faith,  we  find,  on  bringing  the  figures  down  to 
the  close  of  the  year  1895 — and  we  cannot  bring 
them  later  on  account  of  official  slowness — the 
amounts  of  silver  and  gold  in  the  world,  as  pre- 
sented in  values  at  our  ratio,  are  almost  exactly 
equal,  the  greatest  divergence  claimed  by  the  most 
extreme  monometallist  being  16-^  ounces  of  silver 
to  one  of  gold  ! 

I  do  not  indulge  the  hope  that  the  figures  herein 
presented  will  affect  the  opinion  of  any  pronounced 
monometallist.  There  seems  to  be  a  mysterious 
power  in  gold  which  blinds  the  eyes  to  deductions 
from  statistics  and  experience ;  the  internal  con- 
viction of  the  monometallist  that  gold  stands  still 
while  everything  else  changes  in  value  resists  all 
logic.     In   this   country,   that  is.     In  England, 


70  IF  NOT  SILVER,   WHAT? 

where  it  has  not  become  a  political  question,  and 
no  one  is  interested  in  denying  the  facts,  monomet- 
allists  almost  universally  concede  the  appreciation 
of  gold  and  defend  monometallism  on  that  ground. 
It  is  to  the  laboring  producers  of  the  United  States, 
still  open  to  conviction,  that  I  present  these  figures, 
which  to  me  seem  absolutely  conclusive. 


IS  BIMETALLISM  PRACTICABLE? 

OAif  this  great  nation  coin  silver  and  gold  on 
the  same  terms,  at  the  ratio  of  16  to  1,  and  main- 
tain a  substantial  parity  ? 

This  question,  like  all  others  in  political  econ- 
omy, may  be  argued  theoretically  or  on  the  basis 
of  actual  experience.  The  monometallists  say 
that  one  metal  or  the  other  always  has  been  and 
always  will  be  the  cheaper  at  any  ratio;  that  if 
both  be  freely  coined,  the  dearer  will  be  more 
valuable  as  bullion  than  as  money,  and  will  there- 
fore go  out  of  use.  They  say  that,  in  spite  of  all 
devices  to  the  contrary,  we  must  have  monometal- 
lism any  how,  and  always  on  the  basis  of  the 
cheaper  metal. 

The  bimetallist  replies  that  such  is,  in  truth, 
the  natural  tendency  ;  but  when  the  dearer  metal 
is  thrown  out  of  use  as  money  it  thereby  becomes 
cheaper,  and  as  the  cheaper  metal  must  take  its 
place,  a  vastly  greater  demand  for  it  is  created, 
and  so  it  becomes  dearer  ;  thus  an  alternating  ac- 
tion keeps  the  two  near  a  parity,  provided  that 


72  IF  NOT   SILVER,   WHAT? 

the  ratio  corresponds  nearly  with  the  relative 
amounts  of  the  two  metals  in  the  world's  stock. 
They  claim  that  the  world  has  thus  a  far  less  fluc- 
tuating standard  of  value  than  it  ever  can  have 
with  one  metal  alone. 

The  monometallist  rejoins  that  this  is  ''all 
theory."  This  brings  both  parties  to  the  test  of 
experience,  and  by  common  consent  the  expe- 
rience of  France  in  the  seventy  years  from  1803  to 
1873  is  taken  as  the  best  practical  test.  At  first 
view,  it  would  seem  as  if  the  matter  could  easily 
be  settled,  as  the  time  is  so  recent  that  there 
could  be  no  great  obscuration  of  the  history  ;  but 
on  inquiry  a  determination  of  the  real  facts  is 
found  to  be  no  such  simple  matter,  and  as  the 
disturbance  of  natural  law  by  war  and  other 
causes  was  almost  constant,  both  sides  find  enough 
in  the  facts  to  make  a  basis  for  their  respective 
contentions.     Let  us  then  consider  this  history. 

Napoleon  Bonaparte  became  First  Consul  and 
practically  ruler  of  France  in  1799,  and  at  once 
addressed  himself,  with  his  usual  energy,  to  the 
task  of  establishing  a  stable  monetary  system. 
He  found  that  in  1785  Calonne  had  established 
the  ratio  of  15|  of  silver  to  1  of  gold,  and  that  it 
had  worked  reasonably  well.      He   accepted  it, 


IS   BIMETALLISM   PRACTICABLE?  73 

therefore,  as  justified  by  experience,  and  his  Fi- 
nance Minister  carried  through  the  Council  of 
State  an  act  for  the  free  coinage  of  both  metals  at 
that  ratio.  For  seventy  years  this  law  stood  prac- 
tically unchanged,  and  it  is  speaking  with  great 
moderation  to  say  that  in  those  seventy  years 
there  occurred  more  disturbance  of  every  kind  un- 
favorable to  the  maintenance  of  a  ratio  than  in 
any  other  seventy  years  in  monetary  history. 
France  was  twice  conquered,  her  soil  overrun,  and 
her  capital  held  by  the  enemy.  She  four  times 
changed  her  form  of  government.  Once  she  was 
subjected  to  the  payment  of  enormous  war  expen- 
ditures, and  again  not  only  to  the  payment  of 
still  greater  expenditures  but  to  a  fine  exceeding 
in  amount  the  largest  sum  of  gold  ever  held  in 
the  United  States.  During  a  large  part  of  this 
time  the  world's  production  of  silver  was  in  excess 
of  that  of  gold  to  an  extent  very  much  greater 
than  it  has  been  in  recent  years,  and  then,  after  a 
very  brief  interval  of  something  like  equal  pro- 
duction, there  was  a  sudden  and  tremendous  in- 
crease in  the  production  of  gold  until  it  exceeded 
that  of  silver  more  than  3  to  1  in  value.  During 
these  years,  also,  several  of  the  neighboring  nations, 
including    seventy    million    people,   demonetized 


74  IF  NOT   SILVER,    WHAT? 


gold  and  threw  the  whole  burden  of  sustaining  its 
equality  on  the  continent  of  Europe  upon  France, 
and  during  another  portion  of  the  time  there 
were  monetary  disturbances  so  far-reaching  that 
they  shook  the  foundations  of  credit  in  every 
civilized  country  in  the  world.  And  yet,  through 
all  these  convulsions,  France  for  seventy  years 
maintained  a  substantial  parity,  by  welding  the 
two  metals  together  for  monetary  purposes. 

The  contrasted  figures  are  simply  amazing. 
In  the  decade  of  1811-20  there  were  produced  47 
ounces  of  silver  to  1  of  gold,  and  yet  the  market 
ratio  outside  of  France  never  stood  higher  than 
16.25  to  1.  In  the  decade  of  1821-30  the  produc- 
tion was  32  ounces  to  1  and  the  average  ratio 
15_8JL  to  1.  In  1831-40  the  production  was  29 
ounces  to  1  and  the  average  ratio  ISyVfr  to  1.  In 
1841-50  the  production  was  14yV  ounces  to  1  and 
the  average  ratio  15i-V(T  to  1.  The  demonstration 
is  as  complete  as  that  of  any  proposition  in 
Euclid.  In  spite  of  the  enormous  overproduc- 
tion of  silver,  the  maintenance  of  the  mint  ratio 
in  France  held  the  two  so  nearly  together  that  in 
three  years  out  of  four  the  difference  in  other 
countries  only  amounted  to  the  cost  of  transport- 
ing the  silver  to  the  Frencli  Mint  and  of  coinage. 


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IS   BIMETALLISM   PRACTICABLE?  76 

To  this  should  also  be  added  the  fact  that  French 
coins  would  have  a  slightly  less  value  in  other 
countries  than  the  coins  of  those  countries,  but  it 
is  not  easy  to  estimate  the  sentimental  difference 
this  would  make.  From  the  enactment  of  the 
law  of  1803  to  the  limitation  of  the  coinage  in 
1875  France  coined  5,100,000,000  francs  of  silver 
and  7,600,000,000  francs  of  gold,  or  $1,020,000,- 
000  of  silver  and  $1,520,000,000  of  gold,  very 
nearly,  or  40  per  cent,  of  the  total  amount  of  sil- 
ver and  33  per  cent,  of  the  total  amount  of  gold 
produced  in  the  world  during  those  years. 

It  is  further  to  be  noted  that,  whether  gold  or 
silver  was  the  dearer  metal  at  the  ratio  of  15^  to  1 
at  any  given  time,  France  at  that  time  had  more 
of  gold  and  silver  per  capita  than  any  country  in 
the  world,  and  that,  despite  the  enormous  inflow 
of  the  cheaper  metal,  she  held  the  dearer  and  ab- 
sorbed what  now  seems  an  astonishing  amount  of 
the  cheaper.  Thus,  in  1822  the  imports  of  silver 
into  France  exceeded  the  exports  by  125,000,000 
francs,  and  in  1831  the  amount  had  risen  to  181,- 
000,000  francs,  and  then  it  fell  off  and  did  not 
reach  the  latter  sum  again  until  1848. 

On  the  other  hand,  in  the  eight  years  1853-60 
there  was  a  net  import  into  France  of  gold  to  the 


76  IF  NOT   SILVER,    WHAT? 

value  of  3,082,000,000  francs,  or  $616,000,000; 
and  in  the  same  years  a  net  export  of  silver  to  the 
value  of  1,465,000,000  francs,  or  $293,000,000. 
Thus  in  the  short  space  of  eight  years  France 
had  made  monetary,  or,  rather,  metallic  transfers 
amounting  to  $909,000,000,  and  that  without  a 
quiver  of  her  financial  system,  and  scarcely  a  per- 
ceptible trace  of  the  effects  of  that  financial  storm 
which  swept  America,  England,  and  Central  Eu- 
rope with  such  destructive  fury  in  1857-8.  It 
further  appears  that,  desj)ite  the  enormous  import 
of  gold,  the  subsequent  export  was  comparatively 
small,  and  thus,  such  was  the  wonderful  absorb- 
ing power  of  the  nation  under  the  free  coinage 
law  of  1803,  that  France  came  out  of  each  suc- 
cessive financial  storm  with  an  increased  stock  of 
the  precious  metals,  and  more  than  once  has  the 
Bank  of  England  been  compelled  to  apply  to 
France  for  the  specie  to  arrest  a  destructive  panic 
growing  out  of  an  insuflScient  amount  of  coined 
money  upon  a  safe  basis  and  an  overissue  of  sup- 
plemental or  faith  money. 

By  the  year  18G0  it  was  supposed  that  the  dan- 
ger of  the  world  being  "  flooded  with  gold  '^  was 
substantially  over  ;  and  during  that  decade  France 
not   only  sustained   the   double   standard  single- 


IS  BIMETALLISM   PRACTICABLE?  77 

handed  and  alone,  but  did  it  against  the  tremen- 
dous pressure  due  to  the  demonetization  of  gold  in 
Austria,  Germany,  and  other  countries.  It  is  not 
possible  to  say  with  certainty  how  far  gold  would 
have  cheapened,  or,  to  speak  in  the  current  lan- 
guage, how  high  the  ratio  of  silver  would  have 
become,  had  France  during  the  decade  abandoned 
her  bimetallic  system  ;  but  it  is  certain  that  the 
disproportion  would  have  been  enormous,  un- 
doubtedly very  much  greater  than  the  present 
disproportion  in  the  market  between  silver  and 
gold,  resulting  from  the  demonetization  of  silver. 
M.  Chevalier  gave  it  as  his  opinion  that  the  ratio 
would  sink  at  least  as  low  as  8  to  1,  that  is,  that 
gold  would  be  worth  but  half  what  it  was  rated 
at  in  relation  to  silver  in  the  American  coin- 
age, and  this  he  believed  would  certainly  happen, 
despite  the  power  and  willingness  of  France  to 
maintain  the  old  ratio.  He  did  not  venture  to 
say  how  low  the  ratio  would  sink  if  France  aban- 
doned her  policy,  but  he  evidently  looked  forward 
to  a  time  when  gold  would  be  practically  too 
cheap  for  money. 

Years  afterward,  in  writing  as  a  philosopher 
rather  than  an  advocate,  he  took  more  rational 
ground,  and  compared  the  action  of  France  to  that 


78  IF   NOT   SILVER,   WHAT? 

of  a  parachute  which  retarded  the  fall  of  gold. 
The  maximum  effect  of  the  enormous  gold  infla- 
tion of  1848-65  was  to  create  a  disturbance  of  less 
than  five  per  cent,  in  value  of  the  metals  in  coun- 
tries outside  of  France.  During  all  the  years  that 
the  law  of  1803  was  in  practical  force  the  varia- 
tions as  shown  by  a  diagram  seemed  but  trifling, 
despite  the  enormous  over-production  of  silver  for 
many  years  and  of  gold  for  many  other  years,  and 
yet,  immediately  after  1873,  although  ten  years 
were  yet  to  elapse  before  the  world  was  to  produce 
silver  in  excess  of  gold,  almost  instantly  the  dia- 
gram shows  the  downward  trend  of  silver  far,  far 
in  excess  of  any  previous  experience.  The  demon- 
stration is  as  complete  as  anything  in  Euclid. 

How  was  it  through  all  these  years  with  the 
industrial  and  financial  condition  of  France  ?  It 
would  indeed  be  little  to  the  purpose  to  prove  that 
she  had  maintained  the  metals  at  a  parity  by  free 
coinage,  if,  in  the  meantime,  her  people  had 
suffered  loss.  Monometallists  tell  us  that  not  only 
is  bimetallism  impossible,  but  that  the  attempt  to 
maintain  it  is  in  every  way  hurtful,  in  fact,  disas- 
trous. They  point  us  to  the  fact  that  England  is 
the  clearing  house  of  the  world  ;  that  those  whose 
currency  is  not  assimilated  to  that  of  England  are 


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2  3 


IS  BIMETALLISM  PRACTICABLE?  79 

subjected  to  enormous  losses  in  the  exchange, 
resulting  from  fluctuations  ;  that  by  attempting 
bimetallism  a  nation  puts  itself  in  the  second  or 
third  rank,  and  that  the  results  are  in  every  way 
bad.  Well,  all  those  conditions  applied  to  France. 
She,  like  the  United  States,  may  be  considered  as 
regarding  England  in  the  light  of  the  world's 
clearing  house,  and  her  currency  may  be  said  to 
have  fluctuated,  as  they  declare  ours  would,  with 
bimetallism.  What,  then,  have  been  the  general 
results  to  France  ?  What  effect  has  it  had  upon 
her  commercial,  social,  and  industrial  develop- 
ment ?  On  this  point  let  us  return  thanks  that 
the  testimony  is  universal.  No  other  nation  in 
the  world  has  made  such  stupendous  progress  in 
the  general  improvement  of  her  people  as  France 
has  made  since  1803.  No  civilized  country 
probably  had  sunk  to  such  depths  of  popular 
misery  as  had  France  at  the  beginning  of  her 
revolution,  and  we  can  hardly  believe  that  the  sub- 
sequent fourteen  years  of  war  and  internal  turmoil 
had  greatly  improved  her  condition  when  the 
policy  of  1803  was  adopted. 

Bimetallism  and  a  rigid  adherence  to  a  specie 
basis  were  two  of  the  means  adopted  by  Bonaparte 
to  restore  France,  and  during  all  his  wars,  with 


80  IF  NOT  SILVER,   WHAT? 


their  terrible  expenses,  he  never  once  departed 
from  the  specie  standard.  After  the  Act  of  1803 
France  was  still  to  have  twelve  years  of  war  and 
severe  trial.  She  has  subsequently  had  two  revo- 
lutions and  a  foreign  war,  singularly  destructive 
in  its  course,  and  "ending  in  her  subjugation,  the 
occupation  of  her  territory,  and  the  loss  of  two  of 
her  wealthiest  provinces. 

Seventy  years  of  bimetallism  had  left  France 
saturated  with  gold  and  silver  when  her  Emperor 
rashly  provoked  the  war  with  Germany ;  her 
expenses  were  enormously  increased,  and  she  had 
to  pay,  in  addition,  a  fine  of  nearly  $1,000,000,000. 
She  paid  it  with  a  rapidity  that  amazed  the  world, 
but  in  her  hour  of  weakness  she  consented  to  gold 
monometallism.  She  had  become  a  creditor 
nation,  and  could  endure  the  new  system  better 
than  any  other,  except  Great  Britain  ;  neverthe- 
less, she  has  suffered.  Her  exports  had  steadily 
increased  during  all  her  years  of  bimetallism,  and 
never  so  fast  as  during  the  very  years  in  which  she 
was  exporting  silver  so  heavily  because  of  the 
influence  of  cheap  gold.  The  very  year  of  demon- 
etization her  exports  began  to  decline,  and  but 
once  since  have  they  reached  the  old  figures. 

The  statistics  are  fearfully  suggestive.     In  1840 


IS   BIMETALLISM   PRACTICABLE?  81 

her  exports  were  valued  at  1202,231,000,  and  her 
imports  at  $210,413,000  ;  in  1873  her  exports  were 
$964,465,000,  and  her  imports  $915,285,000,  and 
in  only  six  of  the  years  after  she  began  to  be 
"  flooded  with  cheap  gold"  did  her  imports  exceed 
her  exports.  In  1874  her  exports  began  to 
decline,  and  ran  rapidly  down  to  $822,360,000 
in  1878  ;  and  1890  is  the  only  year  since  demone- 
tization in  which  they  reached  the  figures  of  1873, 
being  $968,030,000.  On  the  other  hand,  her 
imports  have  steadily  outrun  her  exports  until  the 
excess  has  been  as  high  as  $300,000,000  in  one 
year  (1880),  and  has  only  once  since  (1885)  been  as 
low  as  $100,000,000.  Here,  then,  are  the  points 
demonstrated  by  France's  official  figures  : 

During  seventy  years  of  bimetallism  she  gained 
steadily  and  rapidly  in  wealth,  her  exports  increas- 
ing much  faster  than  her  population. 

During  the  eight  years  (1853-60)  in  which  she 
was  "  ruined  by  cheap  gold,"  importing  3,082,000,- 
000  francs  of  it  and  exporting  1,465,000,000  francs 
of  silver,  a  bullion  operation  to  the  amount  of 
$909,000,000,  she  increased  her  exports  most 
rapidly  and  with  no  corresponding  increase  in 
imports. 

During  the  twenty  years  following  demonetiza- 


82  IF  NOT  SILVER,   WHAT? 

tion  her  exports  have  been  stationary  or  declining, 
being  199,000,000  less  in  1893  than  in  1873,  while 
her  imports  have  increased. 

Let  us  turn  for  a  moment  and  trace  the  effects 
of  monometallism  in  England  as  compared  with 
bimetallism  in  France  during  the  same  period. 

Eugland  had  in  1816,  when  she  adopted  gold 
monometallism,  about  $10,000,000,000  in  property 
and  had  in  1873  about  140,000,000,000.  In  1816 
she  had  about  18,000,000  people  and  in  1873  about 
32,000,000  ;  her  per  capita  wealth,  therefore,  in 
1816  was  $555,  and  in  1873  $1,250,  or  2^  times  as 
much.  In  1803  the  property  of  France  was  valued 
at  $8,000,000,000,  and  in  1873  at  about  $40,000,- 
000,000;  in  the  former  year  she  had  29,000,000  peo- 
ple, and  in  the  latter  a  little  over  36,000,000.  Her 
per  capita  wealth,  therefore,  in  1803  was  $276,  and 
$1,081  in  1873,  or  very  nearly  four  times  as  much. 

Thus,  despite  the  immeasurable  advantages 
which  England  enjoyed,  political,  social,  and  in- 
dustrial, her  great  colonial  possessions  from  which 
she  drew  enormous  wealth,  and  her  exemption  from 
destructive  war ;  despite  also  the  distressing  con- 
dition of  France  and  her  recent  enormous  losses, 
we  find  that  in  seventy  years  of  bimetallism  the 
working  Frenchman   had  gained   wealth   almost 


IS   BIMETALLISM   PRACTICABLE?  83 

twice  as  fast  as  the  working  Englishaian  had  in  the 
same  number  of  years  of  monometallism. 

France  became  a  creditor  nation,  and  yielded  to 
the  general  pressure  for  a  single  gold  standard ; 
she  has  lost  heavily,  as  shown  in  her  table  of  ex- 
ports, but  she  still  retains  a  large  part  of  the 
momentum  acquired  during  seventy  years  of  bi- 
metallism. Her  wealth  is  still  rated  at  something 
over  140,000,000,000  ;  her  people  have  accumulated 
stocks  of  the  precious  metals  far  in  excess  of  those 
of  any  other  country ;  and  their  business  is  so  solidly 
founded  that  the  storm  which  recently  shook  the 
foundations  of  credit  throughout  the  British  Em- 
pire scarcely  produced  a  quiver  in  France.  They 
have  wisely  avoided  the  excessive  issues  of  faith 
money  (or  check  money)  which  are  the  ever- 
present  danger  of  England,  America,  and  other 
monometallic  countries  ;  and  as  a  result,  they  have 
almost  entirely  escaped  those  fearful  convulsions 
have  that  threatened  the  political  stability  of  great 
nations.  In  fact,  it  is  no  exaggeration  to  say  that 
France  has  only  felt  the  convulsions  of  recent  years 
by  their  reflex  action  on  her  from  other  countries  ; 
and  twice  within  very  recent  years  has  the  Bank 
of  England  been  compelled  to  go  to  France  for  the 
coin  to  stay  the  devastating  work  of  panics  result- 


84  IF  NOT   SILVER,    WHAT? 

ing  from   over-expansion  of  faith  money  on  an 
insufficient  metallic  basis. 

France  has  an  area  less  than  that  of  Texas  by 
some  60,000  square  miles,  yet  its  aggregate  wealth 
is  two-thirds  that  of  the  United  States ;  and  on  the 
basis  of  assessed  value  her  agricultural  wealth  is 
very  much  greater  than  ours.     Mulhall,  the  great 
British  statistician,  says  of  France  that  she  is  "  the 
best  cultivated  country  in  Europe."   Her  6,000,000 
peasant  proprietors  are  the  owners  of  nearly  all  her 
cultivatable  soil,  which  is  worth,  on  an  average, 
$160  per  acre.     She  has  over  400,000  miles  of  the 
finest  common  roads  in  the  world,  which  have  cost 
her,  at  the  ordinary  rate  of  labor,  over  $5,000,000,- 
000.      Their  benefit  goes  chiefly  to  agriculture, 
binding  the  farmers  of    different  provinces   and 
farmers  and  city  dwellers  together.     She  has  over 
10,000  miles  of  canals  and  canalized  rivers  ;  she 
has  25,000  miles  of  railways,  all  in  the  highest 
state  of  efficiency.     She  has,  during  her  bimetallic 
period,  become  the  second  colonial  power  of  the 
world,  and  has  acquired  foreign  territory  at  such 
a  rate  as  to  excite  the  jealousy  of  England.     She 
has  become  the  second  naval  power  on  the  globe, 
and  the  second  exporting  nation,  her  exports  aver- 
aging some   $900,000,000   per  year,   an  amount 


IS  BIMETALLISM   PRACTICABLE?  85 

larger  than  the  exports  from  this  country,  which 
has  a  population  nearly  double  that  of  France, 
nearly  all  of  it  being  manufactures  ;  and  had  the 
same  rate  of  growth  continued  as  was  maintained 
before  France  became  monometallic,  it  is  fair  to 
presume  that  her  exports  at  this  time  would  have 
equalled  those  of  Great  Britain.  Best  of  all,  the 
great  increase  of  wealth  is  in  the  hands  of  those 
who  created  it.  It  is  the  universal  testimony  of 
all  observers  that  the  condition  of  the  French 
people  and  the  general  aspect  of  France  has  stead- 
ily improved  throughout  this  century.  It  is  a 
country  in  which  poor-houses  are  unknown  ;  in  her 
cities  a  beggar  is  a  curiosity.  In  their  country's 
emergency  the  common  people  came  forward  and 
out  of  their  savings  paid  $1,000,000,000  accumu- 
lated during  the  bimetallic  period.  Despite  the 
loss  of  $240,000,000  in  the  Panama  Canal  and  of 
$1,000,000,000  in  the  indemnity  to  Germany,  as 
well  as  two  of  her  richest  provinces,  France  has 
accumulated  hundreds  of  millions  of  dollars  in  the 
securities  of  other  countries,  and  has  only  recently 
been  able  to  subscribe  twenty-five  times  over  the 
Eussian  loan,  and  is  negotiating  a  loan  to  China, 
the  money  for  which  is  to  be  supplied  by  her  work- 
ing people. 


86  IF  NOT  SILVER,   WHAT? 

Be  it  noted  also  that  the  debt  of  France  is 
held  by  the  people  of  France,  largely  by  the  in- 
dustrial class,  and  especially  by  the  agricultural 
class,  and  the  interest  thereon  paid,  instead  of 
being  a  foreign  drain,  is  a  perpetual  renewal  of 
the  current  circulation. 

One  more  brief  contrast  between  France  and 
England.  Ko  reader  of  current  literature  need 
be  told  of  the  appalling  prevalence  of  poverty  in 
Great  Britain.  As  France  is  a  country  without 
poor-houses,  so  it  may  be  said  that  England  is  a 
land  of  poor  rates  and  poor  unions.  The  latest 
ofiBcial  announcement  is  that  the  agricultural  in- 
terest is  declining  more  rapidly  than  ever  before  ; 
and  in  regions  where  only  fifteen  years  ago  the 
land  rented  readily  at  several  pounds  per  acre, 
statesmen  and  economists  are  appalled  at  the 
sight  of  that  which  so  alarmed  our  New  Eng- 
land people  a  few  years  ago  :  the  phenomenon  of 
abandoned  farms.  We  are  told  that  there  is  a 
revival  of  industry  because  British  capitalists  have 
withdrawn  their  money  from  other  countries  and 
will  put  it  in  anything  rather  than  have  it  en- 
tirely idle ;  but  the  condition  of  agriculture 
steadily  grows  worse. 

And  have  we  anything  to  boast  of  in  our  own 


IS   BIMETALLISM   PRACTICABLE?  87 

happy  land  in  comparison  with  France  ?  Our 
natural  resources  so  far  exceed  those  of  any  old 
country  that  a  comparison  would  be  ridiculous ; 
and  the  monometallists  tell  us,  when  they  are 
trying  to  prove  that  gold  is  not  enhanced  in 
value,  that,  by  reason  of  inventions,  a  day's  labor 
will  produce  at  least  twice  as  much  as  in  1870, 
and  in  many  lines  a  great  deal  more  than  twice 
as  much.  Why,  then,  does  not  the  laborer  receive 
twice  as  much  as  he  did  in  1870  ?  As  wages  are 
labor's  dividend  of  its  own  product,  and  as  capital 
had  its  dividend  then  as  now,  if  a  day's  labor  does 
not  bring  the  laborer  twice  what  it  did,  he  is 
wronged  ;  and,  considering  our  resources,  if  we 
are  not  five  times  as  well  off  as  the  French  peo- 
ple, the  only  reason  can  be  that  we  have  slighted 
our  opportunities,  and  blundered  most  fearfully 
in  our  management. 

The  monometallists  profess  to  be  great  sticklers 
for  experience  and  demonstrated  fact ;  to  have  a 
horror  of  "theory."  We  present  them  the  exam- 
ple of  France  as  an  unanswerable  proof  that  one 
great  nation  can  maintain  bimetallism,  and  that 
by  maintaining  it  she  escaped  the  worst  evils  that 
have  affected  the  monometallic  countries,  and  as- 
sured for  herself  an  extraordinary  progress  and 


88  IF   NOT   SILVER,   WHAT? 


prosperity.  We  present  them^  in  contrast,  the 
example  of  England,  and  point  them  especially 
to  the  great  difference  in  the  progress  of  the 
common  people  of  the  two  countries.  We  ask 
them,  with  this  experience,  to  consider  the  pres- 
ent condition  of  this  country,  and  the  evils  that 
have  affected  it  since  1873,  and  seriously  to  con- 
sider the  question  as  to  whether  something  is  not 
radically  wrong  ;  whether  some  malign  influence 
has  not  gone  between  us  and  the  reward  of  our 
work,  and  robbed  us  of  that  to  which  we  are 
honestly  entitled. 


BIMETALLISM  ABROAD. 

Many  monometallists  start  with  the  assumption 
that  what  they  call  the  '*  silver  craze  "  is  a  mere 
fad,  temporary  and  local ;  that  the  advocates  of 
bimetallism  are  confined  chiefly  to  the  United 
States,  and  to  the  western  part  of  it,  and  that, 
if  they  are  thoroughly  defeated  at  the  November 
election,  the  discussion  will  be  at  an  end. 

"  Mistaken  souls  that  dream  of  heaven." 

They  do  not  realize  that,  although  it  has  not 
taken  the  same  popular  form,  the  discussion  is 
quite  as  serious  in  monometallic  Germany  and 
England,  and  in  the  latter  country  opinion  has 
so  far  advanced  that  both  parties  agree  on  the 
enormous  enhancement  in  the  value  of  gold. 
There  is  now  scarcely  a  difference  of  opinion  in 
England  on  this  point,  but  there  is  as  to  the 
effect.  British  monometallists  assert  that  as  Eng- 
land is  a  great  creditor  nation,  the  world  owing 
her,  as  estimated,  $12,000,000,000,  every  advance 
in  the  purchasing  power  of  money  is  greatly  to 


90  IF  NOT  SILVER,    WHAT? 

her  advantage.  In  Mr.  Gladstone's  last  public 
speech  on  the  subject  he  stated  that  fact  with 
great  frankness,  claiming  that  it  was  to  Eng- 
land's interest  that  money  should  remain  as  now 
in  purchasing  power,  and  that  if  she  should 
abandon  the  gold  basis,  because  gold  is  worth  far 
more  than  it  was  a  few  years  ago,  the  world  might 
applaud  her  generosity,  but  it  would  sneer  at  her 
wisdom. 

The  bimetallists  of  England,  on  the  other  hand, 
assert  that  the  enormous  losses  of  traders  owing 
to  the  dislocation  of  the  par  with  silver-using 
countries,  of  manufacturers  by  reason  of  the 
rapidly  increasing  competition  of  the  same  coun- 
tries, of  home  debtors  and  of  many  other  classes, 
and  especially  the  loss  to  agriculture,  far  outweigh 
any  gain  made  by  the  creditors  as  such. 

The  national  debts  of  Europe  now  amount  in 
round  numbers  to  some  $32,000,000,000.  Includ- 
ing all  other  countries,  the  total  of  national  debts 
exceeds  126,000,000,000,  and  the  growth  for  many 
years  averaged  $500,000,000  per  year.  The  local 
public  debts  of  England  and  Canada  are  set  at 
11,735,000,000.  According  to  the  best  authori- 
ties, the  mortgage  indebtedness  of  the  principal 
European  nations  is  as  follows  : 


BIMETALLISM   ABROAD.  91 

For  Great  Britain  and  Ireland $8,000,000,000 

For  Germany 8,500,000,000 

For  France 3,850,000,000 

For  Russia 3,250,000,000 

For  Austria 1,500,000,000 

For  Italy 2,675.000,000 

And  for  all  other  European  countries.  3, 050, 000, 000 

A  total  of  nearly  $31,000,000,000. 

Hon.  Samuel  Smith,  M.P.,  places  the  mort- 
gages of  England  at  something  over  $3,000,000,- 
000,  which  is  more  than  half  the  value  of  the 
landed  property,  and  those  of  Scotland  and  Ire- 
land (the  latter  one  of  the  worst  mortgaged 
countries  in  the  world)  make  up  the  grand  total 
given  above. 

A  highly  suggestive  fact  is  that,  as  experience 
develops  the  enormous  evils  of  the  monometallic 
system,  the  number  of  conversions  among  promi- 
nent men  to  bimetallism  steadily  increases,  and 
they  become  more  outspoken  and  radical  in  their 
views. 

At  the  Paris  Monetary  Conference  of  1867,  Mr. 
Mees,  President  of  the  Bank  of  the  Netherlands, 
protested  against  a  single  gold  standard  and  fore- 
told literally  what  has  followed.  Two  years  later 
Baron  Alphonse  de  Eothschild  said  :  ''  As  a  sequel 


92  IF  NOT   SILVER,   WHAT? 


we  should  have  to  demonetize  silver  completely. 
That  would  be  to  destroy  an  enormous  part  of  the 
world's  capital ;  that  would  be  ruin." 

At  the  conference  of  1878,  Mr.  Henry  Hucks 
Gibbs,  director  and  former  governor  of  the  Bank 
of  England,  was  an  advocate  of  tlie  single  gold 
standard  ;  but  a  few  years'  experience  so  com- 
pletely changed  his  views  that  he  said  :  "  Mr. 
Goschen  and  I  were  together  in  the  conference  in 
Paris  ;  both  of  us  were  sturdy  defenders  of  gold 
monometallism  ;  but  I  have  changed  my  mind. 
I  do  not  say  Mr.  Goschen  has  changed  his  mind, 
but  he  has  somewhat  modified  it." 

In  the  Paris  Conference  of  1878,  Mr.  Goschen 
said  :  ''If  other  states  were  to  carry  on  a  propa- 
ganda in  favor  of  a  gold  standard  and  of  the 
demonetization  of  silver,  the  Indian  Government 
would  be  obliged  to  reconsider  its  position,  and 
might  be  forced  by  events  to  take  measures 
similar  to  those  taken  elsewhere.  In  that  case 
the  scramble  to  get  rid  of  silver  might  provoke 
one    of    the    gravest   crises    ever    undergone   by 


commerce." 


As  it  is  the  fashion  of  our  monometallists  to 
sneer  at  the  possibility  of  bimetallism,  it  may  be 
well  to  quote  here  the  report  of  the  Koyal  Com- 


BIMETALLISM   ABROAD.  93 

mission  on  gold  and  silver,  made  in  1888.  This 
commission  was  composed  of  six  monometallists 
and  six  bimetallists,  but  they  assented  unani- 
mously to  this  proposition  : 

''Sectiojst  107.  We  think  that  in  any  condi- 
tions fairly  to  be  contemplated  in  the  future,  so 
far  as  we  can  forecast  them  from  the  experience 
of  the  past,  a  stable  ratio  might  be  maintained 
if  the  nations  we  have  alluded  to  (herein),  the 
United  Kingdom,  the  United  States,  and  the 
Latin  Union,  were  to  accept  and  strictly  adhere 
to  bimetallism  at  the  suggested  ratio.  We  think 
that  if  in  all  these  countries  gold  and  silver 
could  be  freely  coined  and  thus  become  exchange- 
able against  commodities  at  the  fixed  ratio,  the 
market  value  of  silver  as  measured  by  gold  would 
conform  to  that  ratio  and  not  vary  to  any  con- 
siderable extent.  ■*' 

Mr.  Leonard  H.  Courtney,  one  of  the  mono- 
metallist  members  of  that  commission  who  signed 
the  report,  has  since  become  an  avowed  bimetallist, 
as  have  many  other  prominent  Englishmen. 
Among  them  may  be  mentioned  Professor  Alfred 
Marshall  and  Professor  Sidgwick,  of  Cambridge 
University  ;  Professor  Nicholson  of  Edinburgh  ; 
Professor  H.  S.  Fox  well.   Professor  of  Political 


94  IF  NOT   SILVER,    WHAT? 

Economy  in  University  College,  London  ;  Pro- 
fessor E.  Gr.  Gonner,  of  Liverpool ;  Professor  J. 
E.  Munro,  of  Kings  College,  London ;  and  many 
others. 

Mr.  Courtney  says,  in  his  article  in  the  Nine- 
teenth Century,  April,  1893:  ''Is  it  true  that 
gold  is  this  stable  standard  ?  I  was  one  of  the  six 
members  of  the  Gold  and  Silver  Commission  who 
could  not  see  their  way  clear  to  recommend  bi- 
metallism, and  reported  :  '  When  we  look  at  the 
character  and  power  of  the  fall  in  the  price  of 
commodities,  we  think  that  the  sounder  view  is 
that  the  greater  part  of  the  fall  has  resulted  from 
causes  touching  the  commodities  rather  than  from 
an  appreciation  or  increase  in  value  of  the  stand- 
ard.' In  the  same  paragraph  we  had  said  :  '  We 
are  far  from  denying  that  there  may  have  been, 
and  probably  has  been,  some  appreciation  in  gold, 
though  we  may  hold  it  impossible  to  determine  its 
extenf '  Now,  then,  he  goes  on  to  say  :  "Let 
me  make  a  confession.  I  hesitated  a  little  about 
this  paragraph.  I  thought  there  was  perhaps 
more  in  the  suggestion  of  an  appreciation  of  gold 
than  my  colleagues  believed  ;  but  while  I  thus 
doubted  it,  I  did  not  dissent.  I  am  now  satisfied 
that  there  has  been  an  appreciation  of  gold  greater 


BIMETALLISM   ABROAD.  95 

than  I  anticipated  when  I  signed  the  report,  and  I 
should  not  be  able  to  concur  in  that  same  para- 
graph again.  We  have  been  passing  through  a 
period  of  an  appreciation  of  gold,  and  no  one  can 
tell  how  long  it  will  last.  This  is  a  serious  mat- 
ter. The  pressure  of  all  debts,  private  and  pub- 
lic, has  increased.  The  situation  is  serious.  It 
is  a  dream  to  suppose  that  gold  is  stable  in  value. 
It  is  no  more  stable  than  silver.  It  has  undergone 
a  considerable  appreciation  in  recent  years,  and  in- 
dustry and  commerce  have  been  more  hampered 
by  this  movement  than  they  would  have  been  had 
silver  been  our  standard.  Every  step  taken  towards 
the  further  demonetization  of  silver  must  tend  to 
the  enhancement  of  the  value  of  gold.  It  is  true 
that  much  inconvenience  is  involved  in  the  use  of 
gold  as  a  standard  in  some  countries,  and  of  silver 
as  a  standard  in  others,  with  no  link  to  check  their 
divergent  relations  ;  but  the  advantage  of  having 
the  same  monetary  standard  throughout  the  world 
would  be  counterbalanced  if  we  made  gold  that 
universal  basis  and  tied  all  the  fortunes  of  the 
nations  to  it.'' 

The  bimetallic  sentiment  in  England  is  not 
confined  to  the  mere  theorist  and  doctrinaire  or 
statesman,  but  is  advocated  by  some  of  the  ablest 


96  IF  NOT   SILVER,   WHAT? 

journalists  in  the  kingdom.  Thus,  the  Statist, 
which  undoubtedly  ranks  in  that  country  as  the 
highest  authority  in  financial  and  economic  mat- 
ters, is  quite  as  pronounced  as  Mr.  Balfour  and 
others  in  its  views  upon  the  effect  the  demone- 
tization of  silver  has  had  upon  the  value  of  gold. 
In  its  issue  of  July  1,  1893,  it  says  :  "  The  new 
policy  is  likely  to  intensify  the  appreciation  of 
gold.  One  consequence  of  the  further  apprecia- 
tion of  gold  will  be  to  intensify  the  agricultural 
depression  all  over  Europe.  Most  of  the  charges 
upon  land  having  been  fixed  heretofore,  they  will 
weigh  more  and  more  heavily  upon  land-owners  as 
gold  rises  in  value.  So,  again,  rents  will  become 
more  onerous,  and  it  will  be  found  by  and  by  that 
the  settlement  of  the  last  few  years  was  only  pro- 
visional, and  that  a  further  reduction  will  become 
necessary.  Also  it  is  evident  that  the  burden  of 
debt,  not  only  upon  individuals,  but  upon  govern- 
ments, will  be  much  increased.  Everywhere  the 
burden  of  debt  will  necessitate  increased  taxation, 
and  so  will  weigh  very  heavily  upon  the  general 
population." 

Hon.  Robert  Giffen,  the  well-known  chief  of 
the  statistical  department  of  the  Board  of  Trade, 
London,  was  long  known  as  the  most  determined 


BIMETALLISM  ABROAD.  97 

and  uncompromising  monometallist  in  England. 
In  1888  he  read  a  paper  before  the  Royal  Statistical 
Society,  in  which  he  showed  that  gold  had  notably 
gone  up  in  purchasing  power  ;  that  the  increase 
was  cootinuous  and  likely  to  continue,  and  that 
this  was  the  true  explanation  of  the  fall  in  the 
prices  of  commodities. 

In  a  former  paper  read  in  1879  he  had  predicted 
the  rise  in  the  purchasing  power  of  gold,  and  in 
his  paper  of  1888  he  said  :  ''  If  the  test  of  prophecy 
be  the  effect,  there  was  never  surely  a  better  fore- 
cast. The  fall  of  prices  in  such  a  general  way  as 
to  amount  to  what  is  known  as  rise  in  purchas- 
ing power  of  gold  is,  I  might  almost  say,  universally 
admitted.  Measured  by  any  commodity  or  group 
of  commodities  usually  taken  as  the  measure  for 
such  a  purpose,  gold  is  undoubtedly  possessed  of 
more  purchasing  power  than  was  the  case  fifteen 
or  twenty  years  ago,  and  this  high  purchasing 
power  has  been  continued  over  a  long  enough 
period  to  allow  for  all  minor  oscillations."' 

In  1871,   when  the  discussion  may  be  said  to 

have  begun,   the  French  economist  Ernest  Seyd 

pointed  out  very  plainly  that  the  adoption  of  the 

gold  standard  by  Europe  and  the  United  States 

would   lead   to  the  destruction  of  the  monetary 
7 


98  IF  NOT  SILVER,    WHAT? 

equilibrium  hitherto  existing,  and  then  added  this 
singular  prophecy  :  *'  The  strong  doctrinarianism 
existing  in  England  as  regards  the  gold  valuation 
is  so  blind  that  when  the  time  of  depression  sets 
in  the  economic  authorities  of  that  countiy  will 
refuse  to  listen  to  the  cause  here  foreshadowed. 
Every  possible  attempt  will  be  made  to  prove  that 
the  decline  of  commerce  is  due  to  all  sorts  of 
causes  and  irreconcilable  matters.  The  workman 
and  his  strikes  will  be  the  first  convenient  target ; 
then  speculating  and  over-trading  will  have  their 
turn  ;  many  other  allegations  will  be  made,  totally 
irrelevant  to  the  real  issue,  but  satisfactory  to  the 
moralizing  tendency  of  financial  writers." 

How  literally  has  that  been  fulfilled  in  our 
sight.  At  this  very  time,  the  monometallists  of 
the  United  States  are  pointing  to  all  sorts  of 
causes  and  irreconcilable  matters  to  explain  the 
ruinous  fall  in  prices.  They  not  only  allege  all 
the  causes  here  assigned,  but  many  more  peculiar 
to  this  country  ;  and,  after  the  fashion  of  all  who 
oppose  any  reform  in  the  interests  of  producing 
labor,  they  particularly  and  even  savagely  depre- 
cate agitation. 

By  the  way,  does  not  every  clear-headed  Ameri- 
can know  that  any  system  that  cannot  stand  agita- 


BIMETALLISM   ABROAD.  99 

tion  is  totally  unfitted  to  this  country  ?  Agitation, 
investigation,  public  discussion  in  the  papers  and 
on  the  stump,  are  the  very  life-blood  of  our  insti- 
tutions. And  if  our  finances  were  as  they  should 
1)6,  the  more  thoroughly  they  were  discussed,  the 
more  warmly  would  the  system  be  approved,  and 
the  more  would  investigation  be  invited. 

Hon.  G.  J.  Goschen,  former  Chancellor  of  the 
Exchequer,  pointed  out  as  early  as  1883  that  the 
enormous  increase  in  the  demand  for  gold  conse- 
quent upon  the  demonetization  of  silver  was  liable 
to  create  great  evil.  After  elaborating  this  sub- 
ject, and  saying  that  the  fall  in  prices  had  already 
produced  serious  evils,  he  added  :  "  Some  writers 
have  appeared  to  show  something  approaching  to 
irritation  at  the  view  of  the  situation  that  gold 
should  have  largely  influenced  prices.  I  scarcely 
know  why,  unless  through  the  apprehension  that 
the  bimetallists  may  utilize  the  argument/'  A 
little  later  he  said  :  "  I  must  repeat  that  to  my 
mind  the  connection  between  the  additional 
demand  for  gold  and  the  fall  of  prices  seems  as 
sound  in  principle  as  I  believe  it  to  be  sustained 
by  facts." 

We  might  multiply  at  length  quotations  to  show 
that  opinion  is  unanimous  in  England,  regardless 


100  IF  NOT   SILVER,    WHAT? 


of  party,  to  the  effect  that  there  has  been  a  great 
increase  in  the  purchasing  power  of  gold.  As  to 
the  effect  of  this  Mr.  Giffen  says  :  ''The  weight  of 
all  permanent  burdens  is  increased.  .  .  .  Our 
people,  in  paying  annuities  or  old  debts,  have  to 
give  sovereigns,  which  each  represent  a  greater 
quantity  of  the  results  of  human  energy.  The 
debtors  pay  more  than  they  would  otherwise,  and 
the  creditors  receive  more.  It  is  a  most  serious 
matter  to  those  who  have  debts  to  pay." 

Mr.  S.  Dana  Horton  says  that  on  the  basis  of 
prices  ''The  national  debt,  regarded  as  a  principal 
sum,  has  increased  its  weight  upon  the  shoulders 
of  the  British  taxpayer  between  1875  and  1885 
by  nearly  two  hundred  millions  sterling,  an 
amount  nearly  equal  to  the  Franco-German  war 
fine.'' 

This  gives  us  the  explanation  of  the  fact  that 
the  consols  on  which  the  interest  was  reduced  by 
Mr.  Goschen,  when  Chancellor  of  the  Exchequer, 
to  2 J  per  cent.,  are  now  selling  at  a  much  higher 
premium  than  formerly ;  the  smaller  amount  of 
money  paid  in  interest  will  purchase  a  very  much 
larger  amount  of  commodities  than  the  former 
larger  interest  did. 

The  matter  is  very  clearly  set  forth  by  Hon. 


BIMETALLISM   ABROAD,  101 

Samuel  Smith,  M.P.  :  "If  the  question  of  protec- 
tion is  to  be  introduced  into  the  discussion,  then 
it  will  be  found  to  tell  more  forcibly  against  our 
opponents.  What  do  they  seek  for,  but  the  protec- 
tion of  gold  as  against  silver  ?  They  wish,  as  far  as 
lies  in  their  power,  to  boycott  silver  and  throw  the 
world  upon  gold  alone,  even  though  such  a  course 
should  change  the  value  of  gold.  In  trying  to 
boycott  silver,  they  are  giving  protection  to  the 
wealthy  capital  class,  just  as  truly  as  the  old  corn 
laws  did  to  the  landed  owners  of  this  country. 
The  only  difference  is  that  the  amounts  involved 
are  much  larger  and  the  protected  class  much 
richer  and  the  confiscation  of  the  fruits  of  the 
toiler  much  greater  than  under  the  old  system  of 
the  corn  laws.  When  the  masses  of  this  country 
awake  as  those  of  America  have  awakened  to  the 
magnitude  of  this  question,  they  will  brush  away 
this  idle  talk  that  we  are  trying  to  restore  protec- 
tion." If  Mr.  Smith  were  in  Congress  instead  of 
Parliament,  what  a  howl  there  would  be  about 
him  as  an  anarchist ! 

It  being  now  the  unanimous  opinion  of  English 
statesmen  and  financiers  that  gold  has  greatly 
appreciated,  and  that  such  enhancement  has 
already  wrought  great  evil,  the   important  ques- 


102  IF  NOT  SILVER,   WHAT? 

tion  arises,  Will  this  process  continue  ?  In  the 
speech  already  quoted  Mr.  Giffen  says  :  *'  I  am 
bound  to  say  that  all  the  evidence  seems  to  me 
to  point  to  a  continuance  of  the  appreciation.  It 
is  impossible  to  suppose  that  the  movement  will 
not  extend  to  other  countries.  All  these  facts 
point  to  a  continued  pressure  on  gold.  The  bet- 
ter probability  seems  to  be,  that  the  increase  of 
the  purchasing  power  of  gold  will  continue  from 
the  present  time." 

The  Right  Hon.  A.  J.  Balfour,  now  the  head  of 
the  British  Cabinet,  in  a  speech  delivered  at  Man- 
chester, October  27,  1892,  said  :  "  We  want  two 
things  of  our  currency.  We  require  that  it  shall 
be  a  convenient  medium  of  exchange  between  dif- 
ferent countries,  and  we  require  of  it  that  it  shall 
be  a  fair  and  permanent  record  of  obligation  over 
long  periods  of  time.  In  both  of  these  great  and 
fundamental  requirements  of  a  currency,  our  ex- 
isting currency  totally  and  lamentably  fails." 
After  showing  that  within  fifteen  years  the  money 
of  Great  Britain  and  Ireland  had  advanced  in  pur- 
chasing power  no  less  than  30  or  35  per  cent.,  he 
went  on  to  say  that  of  its  further  progressive 
appreciation  "No  living  man  can  prophesy  the 
limit."    A  little  later  he  spoke  of  it  as  progres- 


BIMETALLISM   ABROAD,  103 

sing  "  steadily,  continuously,  indefinitely,"  and 
closed  bis  remarks  on  that  subject  in  these  words  : 
"  If  you  will  show  me  a  system  which  gives  abso- 
lute permanence,  I  will  take  it  in  preference  to 
any  other.  But  of  all  conceivable  systems  of  cur- 
rency, that  system  is  assuredly  the  worst  which 
gives  you  a  standard  steadily,  continuously,  indefi- 
nitely appreciating,  and  which  by  that  very  fact 
throws  a  burden  on  every  man  of  enterprise,  upon 
every  man  who  desires  to  promote  the  agricultural 
or  industrial  resources  of  the  country,  and  benefits 
no  human  being  whatever  but  the  owner  of  fixed 
debts  in  gold." 

In  his  work  "  The  Bimetallic  Question  "  Hon. 
Samuel  Smith,  M.P.,  presents  as  an  evidence  of 
the  hardships  due  to  the  increasing  purchasing 
power  of  money  these  facts  :  "  The  English  land- 
lords who  borrowed  £400,000,000  on  their  prop- 
erty, agreeing  to  pay,  let  us  say,  £16,000,000  a 
year,  interest  at  4  per  cent.,  supposing  that  it 
represented  one-quarter  of  their  rents,  now  find, 
owing  to  the  fall  of  prices,  that  it  represents  one- 
third,  or  even  in  some  cases  one-half  of  their  rent. 
.  .  .  The  factory  owner,  the  mine  owner,  the 
ship  owner,  who  thought  it  safe  twenty  years  ago 
to  borrow  half  the  value  of  his  plant  in  order  to 


104  IF  NOT   SILVEE,    WHAT? 


find  capital  for  his  business,  now  finds  that  the 
mortgagee  is  the  virtual  owner.  Nearly  all  the 
profits  go  to  pay  the  mortgagee's  claim,  and  in 
many  cases  he  has  foreclosed,  and  sold  out  the  un- 
happy borrower,  ruined  through  no  fault  of  his 
own,  but  through  the  extraordinary  sinking  of 
prices.  As  a  matter  of  fact,  I  believe  that  if  all 
the  fixed  capital  engaged  in  trade  in  England 
could  be  valued  to-day  at  its  real  selling  price,  it 
would  be  found  that  it  would  do  little  more  than 
pay  the  mortgages  and  debts  upon  it.  Trade  is 
very  greatly  and  injuriously  affected  by  sudden 
alterations  in  the  standard  of  value,  esj)ecially 
when  the  alteration  is,  as  now,  towards  increased 
values.  It  arises  in  this  way  :  trade  is  largely  car- 
ried on  by  borrowed  caj^ital,  or,  in  other  words, 
by  the  use  of  credit  in  some  shape  or  other ;  the 
vast  banking  deposits  are  mainly  loaned  to  trad- 
ers ;  a  very  great  deal  of  the  invested  capital  of 
this  country  is  lent  upon  mortgages  upon  trading 
property  such  as  ships,  factories,  and  warehouses. 
A  prudent  trader  usually  considers  it  safe  to  draw 
considerably  beyond  his  floating  cajDital,  and  to 
borrow  say  50  per  cent,  upon  his  plant  or  a  fixed 
capital.  Now,  the  constant  decline  in  prices 
within  the  last  few  years  has  virtually  swept  away 


BIMETALLISM   ABROAD.  105 

his  own  portion  of  the  capital,  and  only  left  him 
enough  to  pay  the  loans  and  mortgages.  For  in- 
stance, a  ship  or  a  factory  built  at  a  cost  of  twenty 
thousand  pounds,  of  which  ten  thousand  were 
borrowed,  is  now  worth  only  twelve  thousand 
pounds,  or  40  per  cent,  less  ;  and  so  the  mortgage 
represents  five-sixths  of  the  value  instead  of  one- 
half,  the  trader's  interest  having  sunk  to  two  thou- 
sand pounds  in  place  of  ten  thousand.  Probably, 
if  trade  is  unprofitable,  he  fails  to  pay  the  interest 
and  the  mortgage  is  foreclosed  ;  the  property  is 
forced  off  at  just  sufficient  to  cover  the  loan  and 
he  is  ruined.  I  have  no  doubt  that  this  exactly 
describes  the  condition  that  confronts  numbers  of 
traders  in  this  country  and  other  countries  hav- 
ing the  gold  standard.  A  great  portion  of  the 
commercial  capital  of  the  country  has  passed  into 
the  hands  of  the  mortgagees  and  bondholders  who 
have  neither  toiled  or  spun.  The  discouragement 
this  state  of  things  produces  is  intense.  After  it 
has  gone  on  for  several  years,  a  kind  of  hopeless- 
ness oppresses  the  commercial  community,  all  en- 
terprise comes  to  a  standstill,  many  works  are 
closed,  labor  is  thrown  out  of  employment,  and 
great  distress  is  felt,  both  among  laborers  and  the 
humbler  middle  class.     Indeed,  it  strikes  higher 


106  IF  NOT  SILVER,   WHAT? 

than  this ;  for  multitudes  of  people  who  were 
once  prosperous  traders  have  now  become  de- 
pendent on  charity.     I  know  many  such  myself/' 

How  fitly  that  describes  the  condition  of  the 
United  States  to-day.  This  was  written  some 
years  ago,  and  so  rapid  has  been  the  subsequent 
decline  in  prices  that  it  almost  equals  the  decline 
he  had  estimated  for  the  fifteen  or  twenty  years 
preceding  the  date  of  his  work.  And  the  end  is 
not  yet. 

In  his  comments  upon  Mr.  Goschen's  address, 
delivered  in  1883,  wherein  he  pointed  out  that  in 
the  decade  from  1873  to  1883  the  annual  supply 
of  gold  had  decreased  in  a  marked  degree,  and 
concurrent  with  this  there  was  a  marked  increase 
in  the  demands  upon  the  world's  stock  of  gold, 
which  was  intensified  by  the  substitution  of  gold 
for  silver  as  money  in  Germany  and  other  countries, 
Mr.  Smith  makes  the  following  observations  : 
"  The  gold  production,  which  for  some  years  ex- 
ceeded £30,000,000  annually,  has  fallen  to  19,- 
000,000  a  year ;  and  the  best  continental  au- 
thorities, such  as  Soetbeer  and  Laveleye,  reckon 
that  more  than  half  that  amount  is  consumed  in 
the  arts. 

"  It  may,  therefore,  be  reckoned  that  since  1873 


BIMETALLISM   ABROAD.  lOT 

only  some  10,000,000  on  the  average  has  been 
available  for  currency  purposes. 

'•  But  Germany  during  that  period  has  intro- 
duced a  gold  currency  of  80,000,000,  the  United 
States  has  used  up  100,000,000,  and  Italy 
has  drawn  some  20,000,000  for  a  similar  pur- 
pose. 

''So  that  200,000,000  have  been  drawn  for 
these  special  purposes,  whereas  the  whole  supply 
of  new  gold  for  coinage  has  not  exceeded  in  that 
time  130,000,000. 

"  The  balance  must  have  been  drawn  out  of 
existing  stocks.  Besides,  a  steady  drain  of  some 
4,000,000  a  year  has  gone  to  India,  further 
depleting  stock  in  Europe. 

*'  While  trade  and  population  constantly  grow 
and  demand  more  metallic  currency,  there  is  a 
steadily  diminishing  quantity  to  meet  it.  If  you 
put  the  present  product  of  gold  at  £19,000,000  a 
year,  and  the  requirements  of  the  arts  at  8,000,- 
000  or  10,000,000  a  year,  while  the  India  de- 
mand is  4,000,000,  there  is  only  left  5,000,000 
to  7,000,000  a  year  for  Europe,  America,  and  the 
British  Colonies. 

"  It  will  seem  to  subsequent  ages  the  height  of 
folly  that  just  at  this  period,  when  gold  was  run- 


108  IF   NOT  SILVER,   WHAT? 

ning  short,  the  chief  states  of  the  world  decided  to 
close  their  mints  against  silver,  and  cut  off,  so  to 
speak,  one-half  the  money  supply  of  the  world  from 
performing  its  proper  functions. 

"  Had  the  world  continued  to  use  both  metals 
as  freely  as  before,  the  painful  crisis  we  have  passed 
through  would  have  been  much  mitigated.  But 
by  a  suicidal  policy  silver  was  cut  off  at  the  very 
time  it  was  most  needed,  and  a  double  burden 
thrown  upon  gold  just  when  it  was  able  to  bear 
only  half  of  its  former  burden. 

"  As  Bismarck  has  well  said,  two  men  were 
struggling  to  lie  under  a  blanket  only  big  enough 
for  one." 

Bad  as  have  been  the  effects  of  monometallism 
in  England,  they  have  been  far  worse  in  Ireland  ; 
and  dark  as  is  the  future  of  the  former,  it  is  light 
itself  compared  with  that  evidently  in  store  for 
the  latter.  Those  familiar  with  Irish  affairs  know 
that  after  a  long  agitation  several  acts  have  been 
passed  to  enlarge  the  rights  of  tenants  and  to 
secure  them  a  larger  share  of  what  they  produce. 
The  Act  of  1881  reduced  the  rents  and  fixed  the 
amount  to  be  paid  at  a  specific  annual  sum  in 
money  for  a  long  term  of  years ;  and  the  subse- 
quent Ashbourne  Act  (so  called  from  Lord  Ash- 


BIMETALLISM   ABROAD.  109 

bourne,  who  introduced  it)  gave  tenants  a  chance 
to  buy  aud  pay  for  lands  in  fixed  yearly  install- 
ments for  forty-nine  years.  The  intent  was  to 
create  a  peasant  ownership  somewhat  like  that  of 
France.  It  was  the  end  of  a  long  fight,  and  was 
supposed  to  be  a  great  victory  and  the  inaugura- 
tion of  a  very  great  reform. 

Scarcely,  however,  was  the  great  victory  won 
and  the  great  reform  inaugurated  when  it  became 
evident  that,  owing  to  the  demonetization  of  silver 
and  increased  purchasing  power  of  gold,  the  ten- 
ants were,  in  reality,  bound  to  much  heavier  pay- 
ments than  before.  Whatever  may  have  been  the 
intent,  the  tenant,  who  bound  himself  to  pay  a 
fixed  annual  sum  as  rent  for  a  long  term  of  years, 
found  himself  bound  to  deliver  a  much  larger 
share  of  produce  ;  and  the  purchaser  under  the 
Ashbourne  Act  found  that  what  looked  so  easy  in 
figures  soon  became  impossible  in  fact,  as  the 
prices  of  his  produce  fell  so  raj)idly  that  each 
successive  payment  became  more  oppressive  until 
it  finally  became  impossible.  Thus  it  looks  now 
as  if  by  the  appreciation  of  gold  all  that  was 
gained  for  the  tenant  is  more  than  lost,  and  that 
in  the  future  his  condition  may  be  worse  than  in 
the  worst  days  of  rack-renting.     In  recent  years 


110  IF  NOT  SILVER,   WHAT? 

this  has  become  plain  to  those  who  have  the  good 
of  Ireland  at  heart ;  they  have  taken  the  alarm, 
and  are  outspoken  on  the  threatening  evils. 
Among  these  is  the  Most  Reverend  Dr.  Walsh, 
Archbishop  of  Dublin.  In  a  recent  interview  he 
says,  referring  to  the  rise  in  the  value  of  gold  : 

"  All  this  is  indisputable  ;  it  is  now  fully  in  the 
public  view  ;  yet  not  even  an  attempt  is  being 
made  in  Parliament,  or  even  out  of  it,  to  bring 
about  an  equitable  readjustment  of  the  conditions 
which  are  proving  so  disastrous  in  other  nations, 
conditions  too  that  are  imposed  under  the  provi- 
sions of  statutes  enacted  as  measures  of  protection 
for  the  tenants.  The  Irish  Land  Acts  of  1881, 
1885,  and  1891  have,  nevertheless — as  a  result  of 
the  increased  and  increasing  value  of  our  present 
unbalanced  and  consequently  untrustworthy  mon- 
etary standard  of  value — become  fruitful  sources 
of  difficulty,  and  may  very  soon  become  fruitful 
sources  of  disaster,  to  those  for  whose  benefit  they 
were  intended." 

Again,  referring  to  the  importance  of  some 
remedy,  possibly  that  which  bimetallism  might 
provide,  he  says  : 

''  The  adoption  of  bimetallism  or  of  some 
equivalent  remedy,  if    there    be    any  equivalent 


BIMETALLISM   ABROAD.  Ill 

remedy,  is,  I  am  convinced,  a  matter  of  im- 
perative necessity;  that  is,  if  the  agricultural 
tenants  of  Ireland — and  I  do  not  limit  this  to 
Ireland — are  to  be  saved  from  otherwise  irretriev- 
able ruin.  If  things  go  on  as  they  are,  even  the 
excellent  land  jDurchase  scheme,  which  is  asso- 
ciated with  the  name  of  Lord  Ashbourne,  may 
become,  before  many  years  are  over,  a  source  of 
widespread  disaster  to  the  tenants  who  have  pur- 
chased under  it." 

Again,  in  view  of  the  steady  and  dangerous  in- 
crease in  the  burdens  of  the  obligations  entered 
into  under  either  of  the  acts  referred  to,  by  rea- 
son of  the  continued  enhancement  in  the  price  of 
gold,  he  says  : 

"  The  bimetallists  may  be  right  or  they  may  be 
wrong  ;  but,  at  all  events,  if  they  are  right,  then 
it  is  noticeably  plain  that  the  Irish  tenants  who 
have  the  misfortune  to  have  their  rents  fixed  for 
terms  of  ten  or  fifteen  years  under  the  Act  of  1881, 
and  in  much  the  same  way  the  Irish  tenant  pur- 
chasers who  have  the  misfortune  to  have  found 
themselves  saddled  with  the  obligation  of  making 
annual  payments  fixed  for  forty-nine  years,  are 
simply  sliding  down  an  inclined  plane  with  bank- 
ruptcy awaiting  them  at  the  bottom  of  it." 


112  IF  NOT   SILVEK,    WHAT? 


And  again : 

"  The  point,  as  I  have  already  stated  it,  is  that 
so  long  as  our  monetary  system  remains  what  it  is, 
every  one  who  is  placed  under  an  obligation  to 
make  yearly  payments  of  a  fixed  amount  of  money 
is  thereby  placed  under  a  burden  which  is  growing 
heavier  from  year  to  year." 

In  discussing  the  question  of  variability  in  the 
purchasing  power  of  gold,  he  says  : 

''The  reason  of  the  liability  to  fluctuation  in 
the  purchasing  power  of  the  sovereign  is  plain  : 
When  gold  rises  in  value  a  larger  quantity  of  any 
other  commodity,  say  of  corn,  of  meat,  of  butter, 
or  of  cloth,  will  have  to  be  given  in  exchange  for 
any  given  quantity  of  gold,  such,  for  example,  as 
the  quantity  contained  in  a  sovereign.  On  the 
other  hand,  when  gold  falls  in  value  a  smaller 
quantity  of  any  other  commodity,  say  of  corn,  of 
meat,  of  butter,  or  of  cloth,  will  sufiBce  to  obtain 
in  exchange  any  given  quantity  of  gold,  such 
as  that  which  is  contained  in  the  sovereign.  It  is 
an  obvious  inference  that  our  gold  coinage,  how- 
ever useful  as  a  medium  of  exchange,  does  not 
furnish  us  with  a  standard  of  value  fixed  and  un- 
alterable. It  does  not  furnish  us,  for  example, 
with  such  a  standard  as  the  yard  is  of  length  or 


BIMETALLISM   ABROAD.  113 

as  the  pound  troy  is  of  weight.  The  popular 
notion  that  the  pound  sterling  constitutes  a  fixed 
standard  of  value  is  merely  a  popular  delusion. 
The  sole  foundation  for  that  delusion  manifestly  is 
that  in  these  countries  the  values  of  all  commodi- 
ties are  commonly  stated  in  terms  of  a  pound  ster- 
ling ;  in  other  words,  in  pounds,  shillings,  and 
pence  ;  a  shilling  being  a  twentieth  part  of  the 
pound,  and  a  penny  the  twelfth  part  of  that 
again. 

"  The  natural  result  of  this  method  of  enhanc- 
ing the  value  of  commodities  other  than  gold  is 
that  when  prices  rise  or  fall  the  impression  is  con- 
veyed to  a  superficial  observer  that  it  is  the  value 
of  other  things  that  changes,  the  value  of  the 
sovereign  remaining  fixed." 

Under  this  head  he  says  again  : 

"The  price  of  things  estimated  in  gold — their 
gold  price — may  change,  whilst  their  price  esti- 
mated in  silver — their  silver  price — remains  unal- 
tered. This  will  occur  if  the  value  or  purchasing 
power  of  gold  goes  up  or  down,  while  the  value  or 
purchasing  power  of  silver  remains  unaltered. 
Suppose,  for  instance,  that  gold  is  in  any  way 
scarce  in  relation  to  the  demands  upon  it.     Then, 

in  any  country  where  gold  is  the  standard  metal  of 
8 


114  IP  NOT   SILVER,    WHAT? 

the  currency,  those  who  wish  to  obtain  a  certain 
quantity  of  gold,  whether  in  coin  or  in  bullion, 
will  have  to  give  a  larger  quantity  of  other  com- 
modities in  exchange  for  it ;  or,  to  put  the  matter 
in  another  light,  those  who  have  only  a  definite 
commodity  to  part  with  will  receive  less  gold  in 
return  for  that ;  in  other  words,  there  is  a  fall  in 
gold  prices.  Suppose,  on  the  contrary,  that  gold 
is  abundant  in  relation  to  the  demands  upon  it, 
then  those  who  wish  to  obtain  a  certain  quantity 
of  gold,  whether  in  currency  or  in  bullion,  will 
not  have  to  give  so  large  a  quantity  of  other  com- 
modities to  obtain  the  quantity  of  gold  they  re- 
quire ;  or,  to  put  the  matter  as  before  in  another 
light,  those  who  have  a  definite  quantity  of  other 
commodities  to  dispose  of  will  obtain  more  gold 
in  return  for  them ;  in  other  words,  there  is  a  rise 
in  gold  prices.  If  in  either  case  there  is  no 
change  in  the  value  of  silver,  then  the  price  of 
commodities  stated  in  silver,  that  is,  their  silver 
price,  will  remain  unchanged." 

In  referring  to  the  very  prevalent  notion,  espe- 
cially among  the  uneducated  classes,  that  the  gold 
unit  of  measure  of  value  does  not  vary,  he  says : 

*'As  for  the  tenant  purchaser,  he  probably 
thinks  that  after  the  extra  pressure  of  the  first 


BIMETALLISM   ABROAD.  115 

few  years  he  may  look  forward  to  easy  times  for 
the  rest  of  his  life.  He  little  knows  what  is  be- 
fore him.  If  things  go  on  as  they  are,  it  will  be 
harder  for  him,  ten  or  fifteen  years  hence,  to  pay 
forty  pounds  a  year  than  it  would  be  to  pay  fifty 
pounds  a  year  now  ;  but  of  all  this  he  knows  noth- 
ing— how  could  he  ?  His  only  idea  is  that  a  pound 
is  always  a  pound,  and  a  sovereign  is  always  a 
sovereign  ;  so,  in  the  belief  that  the  yearly  pay- 
ment, when  it  is  reduced  to  forty  pounds,  will  be 
well  within  his  reach,  he  puts  his  head  into  the 
h  alter.'' 


THE   "DUMP"   OF   SILVER. 

All  the  world  will  dump  its  silver  on  us  if  we 
adopt  free  coinage,  says  the  monometallist.  How 
much,  and  where  will  it  come  from  ?  asks  the  bi- 
metallist.  Oh,  the  world  has  billions  of  it  ready 
for  us,  is  the  vague  general  reply  ;  but  when  we 
ask  for  a  bill  of  particulars  we  get  instead  a  fine 
confusion  of  prophecy. 

Oue  answers  that  it  will  come  from  Spanish 
America.  But  we  have  already  shown  that  all 
nations  from  the  Eio  Grande  to  Cape  Horn  have 
but  $100,000,000  for  their  60,000,000  people. 
The  South  Americans  have  but  83  cents  apiece. 
The  Mexicans  have  $4.54.  The  Central  Amer- 
icans have  $2.14.  And  the  South  Americans  have 
$550,000,000  in  paper  money,  to  bring  which  to 
par  and  maintain  it  there  will  require  at  least 
$300,000,000  more  in  silver  than  they  now  have. 
No  "  dump  "  from  there. 

From  France,  says  another.  Well,  France  has 
$487,000,000  in  silver  coin,  and  some  bullion  ;  only 
$12.94  per  capita  in  coin,  and  valued  at  15^  to  1 


THE   "dump"   of   silver.  117 

of  gold.  At  her  ratio  an  ounce  is  worth  $1.3336  ; 
at  ours  $1.3929.  Will  she  rob  herself  of  coin, 
when  she  has  none  too  much  for  business,  and 
sell  it  to  us  at  a  loss  of  4  cents  on  the  dollar  and 
freight  charges  ?  Germany  has  but  $215,000,000 
in  silver  coin,  less  than  half  as  much  as  France, 
though  having  13,000,000  more  people,  and  Great 
Britain  has  but  half  as  much  as  Germany.  All 
the  other  Europeans  together  have  much  less 
than  these  three  nations,  and  used  at  a  higher 
valuation  than  ours.  How  then  can  they 
''dump"  any  on  us? 

From  India,  say  a  few.  Well,  India  has  a  deal 
of  silver — $950,000,000,  according  to  our  Director 
of  the  Mint.  But  she  has  296,000,000  people,  so 
it  is  but  $3.21  apiece.  And  the  best  evidence 
that  she  has  not  too  much  is  found  in  the  fact 
that  she  is  importing  more.  China  has  but  $2.08 
per  capita  ;  Japan  has  but  $4,  and  is  importing 
heavily;  Australia  but  $1.49,  and  the  black  and 
brown  races  still  less.  In  short,  all  the  world  out- 
side of  the  United  States  has  but  $3,444,900,000 
in  silver  coin,  or  $3.46  per  capita.  It  is  a  plain 
case  that  there  will  be  no  ''dump"  from  the 
coined  silver. 

But  the  bullion,  the  old  silver,  the  scrap  heap. 


118  IF  NOT  SILVER,    WHAT? 

will  they  not  ship  that  to  us  by  billions  ?  Well, 
how  much  is  there,  and  where  is  it  ?  Will  the  no- 
bility and  gentry  of  Europe  melt  down  their  fam- 
ily plate,  the  plain  people  everywhere  their  silver 
ornaments,  and  the  Hindoos  their  household  gods, 
to  send  us  the  silver  ?  If  so,  why  did  they  not  do 
it  when  a  cup,  a  watch,  or  a  silver  god  would  buy 
twice  as  much  gold  as  now  ?  But  the  supposition 
is  absurd.  The  manufactured  articles  are  worth 
very  much  more  than  the  metal  in  them,  to  say 
nothing  of  the  sentimental  value.  A  prize  silver 
cup,  for  instance,  won  in  a  great  race  or  regatta, 
could  not  be  bought  for  ten  times  its  weight  in  gold. 
There  remain,  then,  only  the  scrap  heap  and  the 
stored  bullion,  and  nobody  has  been  able  to  locate 
any  great  mass  of  it.  Is  it  reasonable  to  suppose 
that  moneyed  men  have  been  storing  away  silver 
for  years,  making  no  profit  on  it  and  losing  the 
interest,  and  doing  it  in  the  face  of  a  falling 
market  ?  No,  the  timid  may  be  reassured  ;  there 
will  be  no  ''dump." 

Another  class  threaten  us  that  a  great  mass  of 
securities  will  be  ''unloaded  on  us."  Well,  Great 
Britain,  Germany,  and  Holland,  all  gold  countries, 
are  the  nations  which  hold  practically  all  the 
American    stock    and    bonds    held    abroad.     Of 


THE    "dump"   of   silver.  119 

course  they  did  not  invest  expecting  to  be  paid 
principal  and  interest  in  coin,  for  they  know  that 
there  is  not  enough  in  this  country  to  pay  it ; 
it  is  in  commodities  that  we  must  pay.  So  far  as 
these  securities  are  bad,  as  we  are  sorry  to  say  very 
many  are,  foreigners  having  been  badly  '' plucked  ^^ 
by  some  of  our  operators,  they  will  be  returned 
anyhow.  In  fact,  they  are  coming  back  now.  As 
to  those  which  are  good,  being  held  against  prop- 
erty capable  of  earning  a  steady  and  reliable  in- 
come, they  will  not  be  returned.  Held  in  gold 
countries,  the  interest  and  dividends  on  them  will 
be  paid  in  our  products  measured  in  the  currency 
of  those  countries,  no  matter  what  our  monetary 
system  may  be. 

But  suppose  the  "  prophets  "  of  evil  are  correct 
to  this  extent  that  silver  and  securities  will  be 
''dumped'^  on  us  to  the  amount  of  a  billion  or 
two.  Will  the  foreigners  give  us  all  these  good 
things  ?  Assuredly  not.  They  must  all  be  paid 
for ;  and  with  what  ?  Manifestly  with  agricultural 
products,  for  there  is  little  or  nothing  else.  The 
farmer  must  furnish  the  stuff,  and  he  is  ready  and 
willing  to  do  it — yes,  anxious.  At  least  three- 
fourths  of  our  exports  are  agricultural,  and  of  the 
new  exports  probably  seven-eighths  would  be.     We 


120  IF  NOT  SILVEE,   WHAT? 


find,  moreover,  that  in  1891  55,131,948  bushels 
of  wheat  exported  brought  us  $51,430,272,  and  in 
1892,  157,280,351  bushels  brought  us  $161,399,- 
132,  while  in  1894  the  88,415,230  bushels  exported 
brought  as  only  159,407,041,  and  in  1895,  76,- 
102,704  bushels  brought  us  but  $43,805,663. 
Similarly  it  may  be  shown  that  our  largest  cotton 
exports  have  brought  us  the  least  money  ;  but  this 
is  an  old  story.  It  goes  without  saying,  that  to 
the  farmer  there  are  three  great  factors  in  the 
present  situation  :  a  ruinously  low  price  for  his 
products,  a  tremendous  surplus  left  over  from  last 
year,  and  an  immense  crop  for  this  year  now  add- 
ing to  the  surplus,  with  no  possible  home  con- 
sumption to  give  an  adequate  outlet.  Suppose 
then  the  "  dump "  should  come  and  the  farm 
produce  go — what  then  ? 

First  of  all  there  must  come  as  a  result  a  rise  in 
prices.  Farmers  receiving  much  more  money 
would  immediately  pay  their  most  pressing  debts  ; 
the  release  of  idle  money  would  break  the  dead- 
lock which  now  paralyzes  trade,  and  from  the 
farmer  the  money  would  at  once  be  poured  into  the 
channels  of  rural  business.  The  consumptive  de- 
mands would  be  tremendous  because  of  the  long 
and  forced  abstinence,  and  the  farmer  would  sup- 


THE    "dump"    of   silver.  121 

plj  himself  with  those  things  he  has  so  long 
wanted.  The  railroads  would  have  a  vastly  in- 
creased business,  and  as  a  result  there  would  be  a 
greatly  increased  demand  for  labor.  Instead  of 
the  ruinous  '''cut  in  rates''  which  we  read  of 
almost  every  day,  made  in  order  to  stimulate  the 
movement  of  crops,  we  should  soon  hear  of  vastly 
increased  shipments  at  profitable  rates  ;  these  of 
course  would  soon  be  followed  by  increased  net 
earnings,  which  would  in  time  create  increased 
values  of  securities,  which  again  would  check 
foreign  sales  and  stimulate  purchases.  There 
would  be  a  boom  in  stocks  to  dispel  the  gloom  of 
Wall  Street,  and  we  should  do  the  money-mongers 
good  in  spite  of  themselves. 

Is  this  all  supposition  ?  Well,  we  are  proceeding 
upon  the  theory  of  the  monometallists,  that  a 
billion  dollars'  worth  of  silver  and  securities  would 
be  shipped  here.  We  are  showing  what  must 
inevitably  result  if  their  predictions  should  hold 
good — more  money  for  the  farmers,  more  business 
for  the  merchants,  more  transportation  for  the 
railroads,  and  more  business  for  their  correlated 
industries  ;  and,  as  a  result,  more  work,  abundant 
work,  for  those  now  idle.  And  this  last  would  be 
the  greatest  blessing  of  all.     The  benefit  would  be 


122  IF  NOT  SILVER,    WHAT? 

to  the  farmer,  the  handlers  of  grain  and  all  who 
serve  them,  to  the  retail  tradesmen,  the  small 
manufacturers,  all  the  country  artisans  immedi- 
ately dependent  upon  the  farmer,  and  all  those 
who  supply  all  of  these  classes.  In  short,  there 
would  be  a  general  quickening  of  all  branches  of 
production  and  trade  as  a  certain  result  of  the 
transfer  of  foreign  silver  and  securities  for  our 
agricultural  surplus.  Is  there  anything  in  all 
this  to  alarm  Americans  ? 


ASIA'S  DEMAND   FOR  THE  PRECIOUS 
METALS. 

Among  the  many  errors  which  distort  meu's 
opinions  on  the  so-called  ''silver  question^'  is  the 
belief  that  the  gold  supply  of  the  present  and 
near  future  need  be  considered  merely  as  it  may 
affect  Europe  and  America.  Asia  and  Africa  are 
in  most  men^s  minds  entirely  excluded  from  the 
calculations.  The  popular  belief  in  the  United 
States  may  be  briefly  stated  thus  :  Asia  is  and  is 
long  to  be  the  land  of  stagnation.  Asiatics  are 
unprogressive  and  will  remain  so.  In  contact 
with  the  higher  civilization  of  Europe  the  yellow 
and  brown  races  are  likely  to  fade  away  as  did 
the  Maori  and  the  American  Indian ;  or  if  they 
continue  to  increase,  their  trade  and  government 
will  be  conducted  chiefly  by  Europeans. 

One  finds  this  belief  expressed  in  many  stand- 
ard works.  "  The  helpless  apathy  of  Asi- 
atics "  is  a  favorite  phrase  of  Macaulay.  "  Man 
is  but  a  weed  in  those  vast  regions,"  says 
DeQuincey.     ''In   Asia  there  are   no   questions. 


124  IF   NOT   SILVER,    WHAT? 


only  affirmations,"  says  another  philosopher. 
And  no  amount  of  experience  seems  to  shake 
the  popular  faith  in  this  notion  that  what  Asia 
was  she  is  always  to  be.  And  yet  enough  has 
occurred  within  the  memory  of  men  still  middle- 
aged  to  dissipate  it.  Only  a  few  years  ago  Ameri- 
cans looked  upon  Eussia  as  an  inert  mass,  semi- 
barbarous  in  large  part  ;  and  when  Kennan 
pictured  the  horrors  of  Siberia  most  readers 
thought  the  condition  only  such  as  might  be 
expected  from  such  a  government  and  such 
people  as  they  believed  the  Russians  to  be.  But 
Russia  is  to-day  one  of  the  world's  greatest 
powers,  with  120,000,000  of  people,  building  the 
two  longest  railways  in  the  world,  developing  the 
Siberian  and  Transcaspian  region  with  a  rapidity 
only  exceeded  in  our  own  far  West,  and  drawing 
gold  from  this  country  and  western  Europe  at  a 
rate  that  threatens  the  stability  of  our  financial 
system. 

It  is  only  forty-one  years  since  our  Commodore 
Perry  astonished  the  world  by  securing  admission 
to  Japan  and  proving  to  the  western  people  that 
it  was  at  least  worthy  of  their  notice,  yet  that 
empire  has  undergone  a  most  beneficent  revo- 
lution in  which  the  Daimios  or  local  lords  con- 


Asia's  demand.  125 

sented  to  a  self-sacrifice  without  a  parallel  in 
history,  has  been  the  victor  in  a  great  war,  has 
adopted  the  best  features  of  the  western  civiliza- 
tion while  sacrificing  none  of  its  own,  and  is  ad- 
vancing in  material  development  with  a  rapidity 
rarely  equalled  and  perhaps  never  excelled.  Five 
years  ago  the  first  complete  census  showed  thirty- 
six  cotton  factories  with  377,970  spindles  ;  three 
years  later  the  number  of  factories  had  doubled 
and  that  of  the  spindles  had  much  more  than 
quadrupled,  and  there  is  every  indication  that 
next  year's  tabulation  will  show  a  still  more  rapid 
increase.  In  1894  there  were  17,000  people  em- 
ployed in  that  industry. 

Hon.  Robert  P.  Porter,  who  has  recently  returned 
from  Japan,  after  making  a  thorough  study  of 
her  progress  and  resources,  tells  us  that  while  her 
export  of  textiles  of  all  kinds  in  1885  was  worth 
but  $511,990,  they  were  in  1895  worth  122,177,- 
626,  the  estimate  of  both  years  in  silver  dollars. 
Similarly  in  the  same  years  the  exports  of  raw 
silks  increased  from  $14,473,396  to  $50,928,440, 
of  grain  and  provisions  from  $4,514,843  to  $12,- 
723,771,  of  matches  from  $60,565  to  $4,672,861, 
of  porcelain,  curios,  and  sundries  from  $2,786,- 
876  to  $11,624,701,  and  several  other  articles  in 


126  IF  NOT  SILVER,    WHAT? 

the  like  proportion,  while  the  commerce  for  1895 
showed  an  increase  of  $30,000,000  over  1894, 
reaching  a  total  of  exports  and  imports  of  $296,- 
000,000,  or  about  87.50  per  capita. 

The  government  granted  2,250,000  yen  as  a 
bounty  to  the  first  iron  works,  begun  in  1892,  and 
already  the  products  of  those  iron  works  in  hand- 
made articles  are  underselling  American  products 
on  our  Pacific  coast.  In  five  years,  prior  to 
those  covered  by  Mr.  Porter's  figures  above, 
Japan's  exports  rose  from  34,800,000  to  68,400,- 
000  yen,  and  her  imports  from  27,000,000  yen  to 
64,000,000  yen.  I^or  does  there  appear  any  reason 
to  doubt  the  confident  statement  of  British  ex- 
perts that  development  for  the  coming  years 
will  go  on  much  more  rapidly.  Politics  in  the 
empire  already  turns  upon  fiscal  and  economic 
questions ;  of  two  bills  urged  in  the  Imperial 
Parliament  by  the  progressists,  one  decrees  the 
nationalization  of  all  railways  not  yet  owned  by 
the  state,  and  the  other  asks  for  an  appropriation 
of  50,000,000  yen  for  the  building  of  a  new  rail- 
road. While  this  is  going  through  the  press  it  is 
announced  that  Japan  has  established  two  new 
steamship  lines,  one  running  from  Yokohama  to 
our  own  Pacific  coast,  and  the  other  from  Yoko- 


ASIA'S   DEMAND.  127 

hama  to  Marseilles,  stopping  at  Shanghai,  Hong 
Kong,  Singapore,  and  Columbo. 

The  western  mind  has  long  looked  upon  China 
as  given  over  to  hopeless  inertia  and  stagnation, 
but  China  has  awakened  at  last.  In  one  year  the 
importation  of  illuminating  oil  rose  50  per  cent., 
of  window  glass  58  per  cent.,  of  matches  33  per 
cent.,  and  needles  20  per  cent.  In  six  years  the 
tonnage  of  vessels  discharging  in  Chinese  ports 
rose  by  one-third.  "While  these  lines  are  going 
through  the  press  Li  Hung  Chang  is  in  Europe 
negotiating  for  a  loan  of  400,000,000  francs  to  be 
expended  in  internal  improvements,  and  he  gives 
the  weight  of  his  very  high  authority  to  the  state- 
ment that  China  is  no  longer  opposed  to  the  intro- 
duction of  railways. 

Consul-Greneral  Jernigan  reports  to  the  De- 
partment of  State  that  the  prospectus  of  a  new 
industry  is  now  before  the  public  at  his  station, 
Shanghai,  It  is  called  the  Shanghai  Oil  Mill  Com- 
pany, and  purposes  to  manufacture  oil  from  cotton 
seed.  It  is  the  logical  result  of  the  cotton  mills 
at  Shanghai,  and  the  consequent  stimulus  given 
to  the  cultivation  of  cotton  in  China.  Since  1890 
there  have  been  forty-five  new  manufacturing 
plants  established  in  Shanghai.     They  are  all  in 


128  IF   NOT   SILVER,    WHAT? 

successful  operation,  especially  the  cotton  factories, 
in  which  large  capital  is  invested.     He  adds  : 

"  The  area  suitable  for  cultivation  of  cotton  in 
China  is  almost  as  limitless  as  the  supply  of  labor, 
and  labor  being  very  cheap,  there  can  be  no  doubt 
that  China  will  soon  be  one  of  the  great  cotton- 
producing  countries  of  the  world,  and  that  this 
product,  produced  and  manufactured  in  China, 
will  command  serious  consideration  in  all  calcula- 
tions with  reference  to  the  cotton  marlcet.  It  will 
not  be  safe  to  discount  the  cotton  of  China  because 
it  now  grades  low,  for  it  is  certain  to  improve.  At 
present  it  is  estimated  there  are  3,000,000  tons  of 
cotton  seed,  equal  to  90,000,000  gallons  of  oil, 
now  yearly  lost  to  commerce  which  would  find  a 
ready  market.  The  company  will  start  with  a 
capital  of  250,000  Mexican  dollars.  One  com- 
pany has  already  ordered  its  machinery  from  the 
United  States."' 

The  population  of  the  Chinese  Empire  is  esti- 
mated at  400,000,000,  but  Li  Hung  Chang  de- 
clares, and  experienced  western  observers  confirm 
it,  that  the  country  with  modern  improvements 
could  sustain  more  than  twice  its  present  popula- 
tion in  a  very  high  state  of  comfort. 

Of  all  the  popular  errors,  however,  the  greatest 


Asia's  demand.  129 

is  that  of  regarding  India  as  an  overpopulated, 
stagnant,  and  unprogressive  land.  SuflBce  it  to 
say  here  that  the  population  has  trebled  nnder 
British  rule,  and  that  the  country  is  abundantly 
able  to  sustain  iu  great  comfort  twice  its  present 
numbers  by  agriculture  alone  ;  that  the  exten- 
sion of  the  railway  system  has  recently  been  rapid, 
and  along  with  this  has  gone  on  a  growth  of  man- 
ufactures that  is  simply  amazing.  Only  recently 
Burmah  borrowed  in  London  $15,000,000  for  rail- 
way construction,  a  sum  that  was  subscribed  in 
that  market  five  times  over.  In  these  vast  fertile 
regions,  which  in  comparison  with  what  they  are 
destined  to  be  might  be  called  new  and  undevel- 
oped, live  390,000,000  of  people,  who  are  increas- 
ing at  the  rate  of  something  like  2,000,000  per 
year.  And  these  are  but  a  few  of  the  facts  I  might 
present  to  show  that  the  early  development  of  the 
Orient  is  the  great  fact  America  must  take  into 
account,  and  that  it  is  almost  a  certainty  that  the 
world's  greatest  possible  production  of  gold  in  the 
future  may  be  absorbed  in  the  East,  leaving  the 
"West  to  struggle  with  an  increasing  scarcity.  In- 
deed, Prof.  Eduard  Suess,  the  great  German 
authority,  after  giving  reasons  for  his  belief  that 
the  larger  part  of  the  gold  product  is  used  in  the 
9 


130  IF  NOT  SILVER,   WHAT 


arts,  and  that  all  of  it  will  soon  be,  points  out  that 
Asia  will  soon,  in  all  probability,  absorb  almost 
the  entire  silver  product,  and  that  we  shall  then 
have  a  '^crisis"  indeed. 

In  my  travels  through  India  and  the  Orient 
generally  I  took  notice  of  her  enormous  capacity 
to  export  wheat.  As  a  result,  I  predicted  that 
the  export,  then  but  fairly  begun,  would  soon 
menace  our  supremacy  in  the  British  market.  I 
began  at  the  same  time  to  study  the  social  and 
industrial  condition  of  Kussia,  and  was  soon  satis- 
fied that  she  was  in  the  dawn  of  a  great  day.  I 
predicted  the  eastern  extension  of  her  enterprises, 
and  increased  political  influence,  especially  with 
China,  and  the  consequent  absorption  of  western 
gold  and  capital  generally.  It  appears  from  the 
latest  summary  of  the  United  States  Bureau  of 
Statistics  that  Russia  had,  on  the  first  of  January, 
1893,  $324,828,300  in  gold  in  her  banks,  and  on 
the  last  of  last  May  $424,193,700.  If  she  carries 
out  her  present  policy,  this  is  less  than  half  of  the 
amount  she  will  require.  On  a  strictly  gold  basis 
we  must  allow  her  at  least  $10  per  capita,  which 
would  make  for  the  empire  $1,200,000,000.  But 
if  we  greatly  reduce  the  per  capita,  in  view  of  the 
undeveloped  condition  of  her  subjects,  the  amount 


Asia's  demand.  131 

still  to  be  required  will  be  enormous.  During  tbe 
same  four  years  and  five  months  the  Bank  of 
France  has  increased  its  holdings  of  gold  from 
$260,888,299  to  $391,519,658  ;  the  Austrian-Hun- 
garian Bank  from  $26,634,400  to  $133,006,312, 
and  the  Bank  of  England  from  $109,342,800  to 
$232,791,709,  while  the  Banks  of  Germany,  Bel- 
gium, Spain,  Italy,  and  the  Netherlands  have 
also  increased  their  holdings  some  $30,000,000. 
Thus  we  see  that  in  these  few  years  the  leading 
nations  have  added  nearly  $500,000,000  to  their 
previous  hoards  of  gold,  which  shows  too  plainly 
that  they  are  looking  forward  to  a  gold  famine. 
How  much  more  will  Asia  demand  ?  In  my 
opinion,  India,  notwithstanding  British  rule  and 
influence  there,  has  developed  less  rapidly  than 
China  will  when  she  once  comes  into  as  intimate 
contact  with  western  nations  as  has  India,  for  the 
rigid  system  of  caste  which  prevails  in  India  and 
which  does  not  exist  in  China  has  been  and  will 
be  the  cause  of  greater  immobility.  It  is  not  pos- 
sible to  say  how  long  it  will  operate  as  an  im- 
pediment to  a  high  industrial  development,  but 
from  the  lessons  taught  in  other  countries  where 
race  and  religion  create  similar  castes,  we  may 
believe  in  its  long  continuance.     I  take  pleasure 


132  IF   NOT   SILVER,    WHAT? 

at  this  point  in  referring  to  the  late  able  work  of 
Prof.  Charles  H.  Pierson,  of  Oxford,  who  passed 
twenty  years  in  the  Orient.  In  his  ''National 
Life  and  Character "  he  points  out  that  China  in 
1844  had  doubled  her  population  in  eighty  years, 
and  there  since  has  been  a  great  increase  ;  that 
Russia  has  doubled  since  1849,  very  largely  by 
natural  increase,  the  Eussian  peasant  being  the 
most  prolific  of  human  beings;  and  the  Hindoos, 
who  had  doubled  in  eighty  years,  have  recently 
gained  20,000,000  in  ten  years. 

Professor  Pierson  also  points  out  the  great  error 
of  assuming  that  the  black  and  yellow  races  will 
fade  away  before  the  white,  and  shows  it  to  be  far 
more  likely  that  with  the  increased  security  af- 
forded by  British  and  Eussian  rule  they  will  in- 
crease so  rapidly  as  to  industrially  force  the  white 
race  back  to  the  higher  latitudes  of  the  north 
temperate  zone.  Industrial  commonwealths  will 
not  dispense  with  great  armies — at  least  not  for  a 
long  time — but  China  has  passed  the  militant  age, 
and  reached  the  purely  industrial.  It  may  be  said 
that  work  is  a  pleasure  to  the  Chinese,  as  active 
sports  are  to  Western  people.  Continuous  toil  is 
looked  upon  as  a  matter  of  course.  To  them  it 
does  not  seem  a  hardship  that  men  should  work. 


Asia's  demand.  133 

As  a  measure  of  the  possibilities  of  the  Orient, 
consider  what  has  been  done  in  the  western 
world  within  half  a  century,  where  the  population 
is  much  less  than  one-half  of  that  of  the  far  East. 
Over  four  hundred  thousand  miles  of  railroad 
have  been  constructed,  together  with  a  vast, 
almost  incalculable  system  of  telegraphs,  to  say 
nothing  of  the  great  cities  and  common  roads,  or 
the  enormous  mass  of  productive  machinery, 
which  has  even  outrun  the  increase  of  population. 

In  round  numbers,  some  forty  thousand  mill- 
ions in  capital  have  been  absorbed  in  railroads 
alone.  Add  the  amount  absorbed  in  telegraphs, 
telephones,  steamships,  and  electric  plants,  and  a 
thousand  and  one  appliances  of  civilization,  and 
the  total  is  beyond  comprehension.  And  all  these 
things  have  yet  to  be  created  and  adopted  in  the 
Oriental  countries.  How  rapidly  the  development 
may  go  on  there,  and  what  an  enormous  mass  of 
capital  will  be  absorbed,  is  clearly  indicated  by 
what  has  been  done  in  a  very  few  recent  years. 
And  so  far  we  have  left  Africa  entirely  out  of  the 
account,  a  country  with  a  vast  population  and 
richly  dowered  with  natural  resources  and  with  a 
capacity  for  rapid  development. 

Possibly  the  Orientals  will  not  suddenly  become 


134  IF   NOT  SILVER,    WHAT? 

progressive  to  the  degree  here  anticipated,  though 
Russia's  eastern  march  has  fairly  rivalled  our 
western  march;  and  it  must  be  borne  in  mind 
that  to  develop  the  appliances  of  western  civiliza- 
tion we  had  all  the  experiments  to  make,  all  the 
crude  preliminary  work  to  do  in  creating  the  sys- 
tem, which  the  Orient  will  receive  from  us  in  its 
present  perfected  form,  and  be  able  to  go  on  with- 
out any  mistakes,  and  thus  enable  them  to  adopt 
within  a  very  brief  time  that  which  we  gave  the 
labors  of  several  generations  to  discover,  develop, 
and  apply. 

How  enormous,  then,  will  be  their  absorption  of 
western  capital  and  gold. 

Is  it  still  maintained  that  the  Orientals  lack  the 
capacity  for  such  development  ?  Then  look  at 
their  achievements  in  every  country  to  which  they 
have  emigrated,  and  especially  in  this.  Their  prog- 
ress here  in  the  industrial  arts,  even  while  they 
were  but  a  handful,  was  so  rapid  that  the  govern- 
ment was  called  on  to  restrict  them.  Even  now 
the  papers  contain  alarming  statements  to  the 
efEect  that  Japan  is  invading  our  markets  with 
those  specialties  in  the  making  of  which  we,  but 
a  little  while  ago,  considered  ourselves  superior  to 
all  the  rest  of  the  world.      And  no  tariff  is  high 


ASIA'S   DEMAND.  135 

enough  to  keep  them  out.  It  is  observed  by  all 
travellers  in  China  and  other  Oriental  countries 
that  there  exists  in  as  great  a  degree  as  in  the  West 
a  desire  for  indulgence  in  those  things  classed 
as  mere  luxuries  which,  in  all  nations,  absorb  so 
great  a  share  of  its  total  wealth.  Every  one  who 
travels  through  the  eastern  countries  marvels  at 
the  extraordinary  richness  and  delicacy  of  those 
things  adopted  by  them  for  ornamentation,  luxury, 
and  convenience.  And  they  are  of  such  a  charac- 
ter as,  far  more  than  in  the  western  world,  in- 
volves the  consumption  of  the  precious  metals. 
Along  with  the  national  desire  to  adopt  that  which 
is  useful  and  ornamental,  a  highly  mimetic  nature 
prompts  them  to  seize  upon  and  adapt  with  singu- 
lar readiness  that  which  is  brought  to  their  notice 
as  being  useful  and  constituting  a  salient  feature 
of  western  civilization. 

To  sum  it  all  up,  we  have  in  Asia  somewhere 
near  800,000,000  of  people,  who  are  certainly  in- 
creasing by  10,000,000  a  year,  probably  many 
more,  and  these  people  pressed  on  by  Russia  on 
the  north  and  west,  by  Great  Britain  and  France 
on  the  south,  as  well  as  by  the  wonderful  energy 
of  the  Japanese  on  the  east.  How  much  gold  will 
all  these  people  absorb  in  the  future  ?    And  it 


136  IF  NOT  SILVER,   WHAT? 


should  not  be  forgotten  that  not  only  is  the  pres- 
ent population  to  be  supplied,  but  an  increase  of 
population  is  to  be  allowed  for,  which  at  ten  dollars 
per  capita  would  alone  absorb  the  entire  annual 
gold  production  above  the  amount  used  in  tbe 
arts.  If  any  one  thinks  this  forecast  fanciful,  I 
only  ask  him  to  consider  what  has  been  done  in 
the  last  thirty  years,  and  then  make  his  estimate. 
For  what  the  possible  absorption  of  the  precious 
metals  by  the  Asiatic  people  may  be,  we  need 
only  to  refer  to  what  has  been  done  by  India.  By 
reason  of  the  development  of  her  industries  and 
resources  caused  by  her  intercourse  with  west- 
em  nations  she  has  imported  in  net  excess  of  ex- 
ports, from  the  years  1835  to  1893,  $750,000,000  of 
gold  and  $1,750,000,000  of  silver,  or  about  one- 
seventh  of  the  entire  world's  output  of  gold  and 
about  one-half  of  the  world's  output  of  silver  dur- 
ing that  time.  Professor  Shaw  is  authority  for  the 
statement  that  her  demand  for  the  precious  metals 
is  yet  unabated  and  great  as  ever.  When  we  re- 
member that  the  average  population  of  India 
during  this  time  was  only  about  200,000,000,  and 
that  there  are  about  three  times  as  many  people 
yet  in  Asia  who  have  even  greater  latent  powers  to 
absorb  the  precious  metals,  one  can  form  some 


Asia's  demand.  137 

feeble  estimate  of  what  an  exhaustive  drain  upon 
the  gold  and  silver  supply  of  the  world  will  ensue 
when  these  nations  awaken  and  develop  their  re- 
sources and  energies  through  the  stimulating  in- 
fluences of  western  ideas  and  example. 

Having  considered  the  possible  momentous  ab- 
sorption of  the  precious  metals  by  the  Asiatics,  it 
may  be  well  to  consider  what  Europe  itself  is 
likely  soon  to  do  in  the  same  line.  England, 
France,  and  Germany  are  the  three  most  substan- 
tial and  commercial  nations  of  Europe,  and  their 
experience  may  be  taken  as  an  index.  We  find 
that  these  three  use  on  an  average  $16.40  per 
capita  of  gold.  To  give  the  same  to  the  rest  of 
Europe,  including  Russia  and  Turkey,  will  require, 
in  addition  to  their  present  stock,  13,780,000,000 
in  gold,  or  nearly  as  much  as  the  entire  world's 
present  stock  of  gold  coin. 

If  the  example  of  France  and  the  Netherlands 
— two  of  the  soundest  and  most  conservative 
nations  in  the  world — be  similarly  taken  as  an  in- 
dex to  the  probable  use  of  silver,  it  appears  that 
these  two  nations  average  $12.50  per  capita.  To 
supply  the  rest  of  Europe  to  the  same  extent  will 
require  an  addition  of  13,563,000,000  to  her  pres- 
ent stock  of  silver,  or  about  three-fourths  as  much 


138  IF  NOT  SILVER,   WHAT? 

as  the  present  coined  silver  of  the  world.  In  view 
of  these  facts,  is  not  the  real  question,  not  whether 
there  is  gold  enough,  but  whether  there  is  both 
gold  and  silver  enough  for  the  future  monetary 
requirements  of  the  world  ?  Does  it  not  seem 
that  the  nations  are  soon  to  be  confronted  with 
this  dilemma  :  that  the  product  of  the  precious 
metals  must  be  greatly  increased — and  is  that  pos- 
sible ? — or  that  for  the  want  of  gold  and  silver 
there  must  be  a  serious  check  to  the  progress  of 
civilization  ? 


jV|AR24M§ 


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